Saving money becomes simpler when you comprehend the true value of your income and learn to prioritize expenses. Beyond tuition fees, studying abroad involves mandatory costs like accommodation and food, which can constrain your budget and leisure choices. Fret not! We’ve got you covered with numerous tips and ideas on how to manage finances effectively as a student.


How to create a budget plan for college students in four simple steps. Why is a budget plan essential? It empowers you to take control of your finances by determining how much of your monthly income needs to be allocated to expenses and how the remainder is managed. By following a monthly plan, you gain increased awareness of your finances, enabling informed decisions on spending and saving. 


How is it done? The process is broken down into four clear steps:

Step 1: Record Your Monthly Income 

Jot down the amount of money available to you each month on a piece of paper.


Step 2: Identify Your Spending Patterns 

This is the next crucial step in mastering the art of budgeting as a student. Before making cuts or adopting budget-friendly choices, it’s essential to comprehend your spending habits. Begin by creating a list of all your potential expenses.

Take a moment to jot down the amount of money you have at your disposal each month.

For example:

  • Tuition fees – likely your largest expense.
  • Accommodation – usually the second most significant cost; the type of accommodation, whether a dorm, shared flat, or solo apartment, influences the expense.
  • Utilities – covering water, electricity, internet, and heating costs.
  • Transport – consider your commuting method and its associated expenses, be it walking, biking, driving, or public transport.
  • Food – choose between cooking and eating out; the former is generally more cost-effective.
  • Books and supplies – depending on your field of study, you may need to purchase specific materials and books.
  • Personal items – including toiletries, clothes, and shoes.
  • Entertainment – as a student, you’ll find ample opportunities to spend on movies, socializing in bars or pubs, and other recreational activities.
  • Emergencies – it’s advisable to set aside funds for unexpected events.

Categorize your list into essentials (e.g., accommodation, utilities, food) and non-essentials (books, entertainment, etc.)


Step 3: Calculate Your Budget 

Subtract expenses from income to near-zero, assigning a purpose for every dollar. The 50/30/20 method is popular: allocate 50% for needs (rent, food), 30% for wants (Netflix, shopping), and 20% for goals (savings). 

Adjust percentages based on your situation, considering alternatives like the 80/20 Rule or the 70/20/10 Rule. The 80/20 Rule designates 20% for savings, and the remaining 80% is flexible spending. The 70/20/10 Rule allocates 70% for living expenses, 20% for paying debt, and 10% for savings. If budgeting is challenging, consider using an expense-tracking app to help you better record all your expenditures.


Step 4: Monitor Your Spending 

With a solid plan in place, begin tracking your expenses. Throughout the month, record every expenditure and reference your plan. Rather than just buying a coffee, deduct that amount from your ‘Wants’ allowance. This helps you recognize spending habits and ensures you stay within budget, especially on discretionary items like entertainment. Before the new month begins, adjust your budget based on observations or changes from the previous month.