How To Create A School Budget For Students

Estimated reading time: 15 minutes

Track your expenses and maintain your finances with a school budget. Learn how to budget easily and avoid financial stress during higher education.

How To Graduate Without Adding Extra Consumer Debt

A school budget is the last thing you want to consider when you embark on your first adult journey, but you should.

Higher education always comes with a price tag and expenses you need to be prepared for every month with a school budget.

Do you need a back-to-school budget?

The answer will always be a resounding yes because it’s the only way to track your expenses so you’re not overspending.

I don’t think schools offer debt management degrees, so either buckle down or risk more debt than you can handle after school.

A school budget is essential for most students I’ve talked to, but the hard part is getting started, and I will show you how to budget the easy way.

My first tip is to avoid credit card companies and on-campus marketing at all costs.

You don’t need one, and if you apply for a student credit card, use it wisely, or you will find out how fast debt can crush you.

Creating A Back To School Budget

I get so many emails from students wanting to know how to budget their money when they go to school.

You may graduate with student loans but don’t need to with excessive consumer debt.

Budgeting doesn’t need to be stressful as it is relatively simple when dealing with money coming in and going out.

It is when debt is factored in that things can get tricky because now you are faced with paying for something you’ve already used.

There’s never a wrong time to prepare your finances if you are University or college-bound.

Some people make a budget harder than it is, but creating a school budget is the most terrifying part for newbies.

A budget can alter someone’s life, who may be used to spending money without accountability.

You may even need to learn how to say no; I’m on a budget if you’re the type that gives in easily, especially to your friends who will ask you to go out often to eat and shop.

It’s an essential time in a student’s life, and this is one area many graduates say they wish they had prepared better for.

Spending money frivolously while you are in school will return to haunt you, and being prepared means you’ve won half the battle.

Step 1: Setting Personal Financial Goals

First things first.

I will talk as if it was me going to school again.

I’ve just graduated this year for the second time, but the first time in Canada, so I’ve learned along the way. 

I’m sitting with my piece of paper and a pen to write my goals and consider my options.

You should set long-term, short-term, and in-between-term goals that cover the big stuff and all the little things in between.

• How long is my course?
• How many hours a week am I in school?
• What do I hope to do when I have finished my education?
• What are the odds of me getting a job in the area or moving to get an apartment for work? Living at home after school is helpful as most parents will help you recover and pay off some of your debt. In my case that didn’t happen so I rented a room.
• I also want to know if I wish to work part-time or full-time while in school.
• How many hours will I devote to homework, research, and group work?
• Do I want to start saving for a down payment to buy my home after school?
• Do I want to buy a car?
• When do I start investing in my future?
• Do I want to go on trips or concerts after school or during March Break?
• How much money will all this cost?
• How will I save for it so I don’t go into debt?
• Do I need a credit card?

Remember, these are just random ideas to get your financial brain juices flowing.

You can expand on them later.

Step 2: Sourcing School Budget Money

How much money will I have to spend every month while attending school?

Most people make simple budgeting mistakes but can avoid them if you prepare your finances.

Money depends on your funding sources, which must be factored into your monthly budget. 

Most students get money from various places such as;

• Ontario Student Assistance Program (OSAP)
• Student Summer Job
• Parents, Relatives, and other personal loans
• Education Funds
• Bursary, Grant, Scholarship
• Gifts
• Part-time or Full-time job
• A co-op or work term will pay most of the time, but you won’t know what you will get paid until a company hires you.

School Timeline For Budgeting

Typically, students in Canada are in school for ten months, so your budget will likely be structured for that period.

If you do not live on campus, you may have to sign a 12-month lease, which may or may not allow you to sublet.

I always liked to think 12 months. That way, it was a cushion for me in an emergency.

You can easily use ten months as your budget; it’s up to you.

Net Income Example:

So please take all the money you will receive to go to school for the year and add it all up.

• OSAP-$5,000
• Summer Job $3,000
• Parents, Relatives $1,000
• Bursary, Grant $5,000
• Gifts $1,000
• Part-time or full-time Job (Net income after taxes paid) $ 250-week x 52 weeks per year $13,000 per year or for ten months per year $250 week x 43.33 weeks  is 52 weeks/12 months x10 months=43.33 weeks x $250 = $10,832.50 year

Add it all up. (I’m using working part-time for 12 months with a made-up income)

Yearly Net Income-$5,000+$3,000+$1,000+$5,000+$1,000+$13,000=$28,000 net for 12 months of the school year

So you have approximately $28,000 for the entire year to pay for everything you need to pay, including school.

Step 3 – Other Expenses For Your School Budget

• Cost of your education $5,000 Total All-Academic Terms
• Books for both semesters $1,000 total *Tip-Search online or at your school campus online forums or boards for students selling second-hand books. For the most part, new editions have small changes, or you may find just what you want. I sold all my school books in Kijiji for about half of what I paid. Try not to mark up your books to get the best return. Sell them as soon as you no longer need them. Buy them as soon as you know what you need.
• Tools for school, school supplies $200 total – Check local flyers and deals online for the best back-to-school supplies deals in your area.

Total $5,000+1,000+$200=$6200 for the year (I could be missing something, but you get the idea in this example). You will have any education-related expenses in this category.

Yearly Net Income $28,000-$6200 (Education expenses)=$21,800 left for your fixed and variable expenses for the 12 months.

Remember, I am using 12 months, and if you will only be in school for 10 months, do the math according to the length of time you will need.

Monthly Net Income- $21,800/12 months =$1816.66 (keep in mind if you are terminated from your job, laid off, or quit, you will have big problems if you don’t have a PLAN B as a chunk of your money is coming from your part-time job here)

If you don’t plan on working, your OSAP loan may be higher unless you have enough saved for your education and living expenses.

Don’t always assume you will get OSAP, either.

If your parents make a certain amount of money, you may be denied an OSAP loan and have to source a personal or bank loan.

It’s best to enquire about financial assistance well before the school year, even if you don’t know you will be accepted.

Asking questions at your local financial aid office or making an appointment with a banking officer is never a waste of time.

School Funding From Financial Institutions

Some students turn to financial institutions for a line of credit for students as well.

You might think $1816.66 is a lot of money, but wait and see how fast it will disappear into your school budget.

I’m also using higher than minimum wage net income, so students may have less or more to work with depending on where they work and their budget.

Now you know you have approximately $1816.66  per month to spend. 

So, what do you spend it on?

You need to break your budget categories into Fixed expenses and Variable expenses.

Saving and Earning Money For Your School Budget

Money-Saving Tip: Hook up with a Student Price Card (SPC) for optimal savings at many shops in the mall and restaurants.

It’s worth the money if you know you will spend at these shops and have the SPC app for discounts.

Money-Saving Tip: If you go to the movies with your friends, hook up with a SCENE card to get points each time you go.

You can then use your rewards points towards free movies, snacks, and discounts on Tuesday Tickets.

Money-Saving Tip: Shoppers Optimum Card allows you to save points each time you shop.

These points can add significantly to redemption periods all year long.

Money-Saving Tip: If you enjoy the computer, why not earn extra money?

Earn cash for taking surveys, shopping online, watching videos, and playing games without sweat.

You can’t earn cash any easier and it will help add money to your savings so you can free up the debt you’re working to get rid of or help increase your money power.

It’s a WIN-WIN situation.

Sign up for Swagbucks. It’s FREE; we have it and LOVE it. 

Money-Saving Tip: I’ve documented many websites where you can sign up to take surveys and earn cash or gift cards. Take advantage of these opportunities when you can.

Money-Saving Tip: Use Coupons! Don’t miss the grocery savings by signing up for Checkout51, FlashFood, Too Good To Go, and other Coupon Apps.

Money-Saving Tip: If you grocery shop, sign up for Neilsen Homescan Canada, where you earn points for grocery shopping and redeem prizes such as gift cards.

Fixed Expenses

What are Fixed Expenses?

Fixed expenses are expenses that don’t change from period to period, such as your housing, insurance, car payment, and cable bill.

You know the exact amount will be relatively the same every month.

These monthly expenses, such as cable, must be paid, but the services can also be eliminated.

Variable Expenses

What are variable expenses?

Variable expenses may increase depending on your spending habits, usage, inflation, and cost.

Variable expenses include utilities, allowance, groceries, gas, eating out, entertainment, gifts, health, and beauty.

These are expenses or areas you can cut if you can’t balance your budget.

School Budget Categories

Everyone’s school budget will differ based on need, but the main budget categories below will give you an idea of what to include in your budget.

Housing Costs

Will you rent a house, apartment, or room or live on campus?

This will be one of your biggest expenses.

I’ve seen rent for a 1 bedroom apt at $800 plus in our area.

If you rent a room or share a place, it may run you $300-$450 or more per month plus a part of the utilities.

A good place to look is on Kijiji, Campus rental boards, or even Facebook Groups in the city where your school is located.

Rental pricing will differ everywhere in Canada, but generally, a room rental will cost around $450-$550 a month, and a one-bedroom apartment varies from $700 to thousands.

Food Expenses

If you live off-campus, you will need to buy groceries, and even students with a school meal plan often visit the grocery store for snacks.

The key here is to understand how much your grocery budget should be so you know exactly how much to spend.

• Is a meal plan included with your on-campus living?
• Do you pay as you go to the cafeteria?
• How do roommates split grocery expenses?

Transportation

Bus pass, taxi, Uber, Go Train, subway, parking, gas, car insurance, license renewal, and vehicle maintenance.

Clothing

School clothes, seasonal clothes, work clothes, shoes, and accessories.

How much do you need or can you afford?

Second-hand clothing shops are always a great idea when you want to save money.

Entertainment

Pubs, concerts, eating out with friends, coffee, smoking, etc, are all expenses you must budget for.

It would be best to consider everything you would do and put it in this category.

Editing your budget can happen anytime, especially if you miss something, so tracking your expenses is important.

Utilities

Gas, hydro, water- You may owe a part of this if you have shared housing, or it may be included with your rent.

Ask your landlord for details.

Renters Insurance

Are you covered under your parent’s insurance plan while away at college or university?

Take pictures of everything you own and keep receipts.

If something should happen, your insurance company may need this information for reimbursement.

You may also need your own tenant’s insurance.

Telecommunications

This includes your internet, cable, cell phone, home phone, and anything else that falls under this category.

Emergency Savings

Saving as little as $5-$10 monthly is better than $0.

Ideally, saving 3 to 6 months of your expenses is recommended in your Emergency Savings Account.

Health and Beauty

Anything related to taking care of yourself, including toiletries, make-up,

Dental, Prescriptions, and Health Insurance

Who will be paying for your dental and prescription costs? 

Are you covered under your parent’s work plans, or do you need to get your student coverage through your education system?

OHIP+ provides more than 4,400 drug products at no cost for anyone age 24 years or younger who is not covered by a private plan.

You don’t need to enroll — all you need is a health card number and an eligible prescription.

Source: OHIP

Gifts and Birthday

Will you buy gifts for friends, achievements, birthdays, Christmas, etc. throughout the year?

Debt Repayment

Credit card or other debt repayment.

Do you owe money on your credit card or other debts?

Miscellaneous

Items that pop up that are not categorized that are not an emergency

Investments

If you have already invested money, you need to budget for it. 

Examples:

Adult students returning to school like I did might have retirement investments that they pay into. 

I was investing in my RRSP with the money I made from working, but now you can also invest in a Tax-Free Savings Account (TFSA).

Step 4 – Finalizing Your School Budget

Add all the fixed items or items you must pay for and subtract them from your net income.

Whatever money you have left, you now have to divide that money into your variable expenses.

You MUST always balance your budget; if you can’t, you need to cut expenses you can’t afford.

Once you have all your budget totals, you can total your expenses minus that from your monthly net income.

If it doesn’t balance out, you need to make further changes or get out and earn more money.

Slicing expenses might mean no cell phone, limited or no data plan, no home internet, buying second-hand clothes, and less eating out. 

If you spend more than you earn, you will ALWAYS go into debt.

School Budget One-Time Expenses

What about one-time payments or expenses?

You must factor in expenses, such as vehicle stickers, even if they are one-off yearly payments.

If your birthday is in January, you must get your vehicle plate sticker for $75.00.

You budget this expense annually and save for it each month in a separate bank account only for projected expenses.  

So $75/12= $6.25 per month that you need to save, so the money will be there when you need to pay that bill.

We call these our projected expenses and all the money is in a bank account specifically for this purpose.

Besides, it’s too easy to mix up money if you keep it in your regular savings or chequing account.

Our emergency savings sit in another account so we don’t mess them up or get tempted to spend it.

It’s up to you how you want to keep your accounts, but we found keeping them separate super helpful, and we still do this today.

If you want to follow our budgeting series on how we designed our budget, I recommend reading my 10-step budgeting mini-series.

You will learn everything we did and still do today to keep our debt and stress-free from financial worry.

Free Budget And Budget Printables For Your Budget Binder

You can also check out all my FREE downloadable tools, but here are just a few to give you an idea of what to expect.

• Free 51-Page Budget Binder – for blog subscribers only.
• Basic Budget Sheet
• Overtime Tracking Sheet
• Grocery Shopping List
• Pantry List
• Freezer Inventory List
• Weekly Menu Planning

Grocery Expenses

How much should your grocery budget be?

There is no easy answer to this, as it depends on how much you can afford.

A budget will always give you the answers you need.

You can find hundreds of Canadian grocery shopping tips in The Ultimate Grocery Shopping Guide to keep costs low.

Earn Cash Back with Rakuten when you shop online!!

This is the best way to earn money back, and trust me, we love it!!!

Sign up for the app using my link, and when you make your first purchase, you will get $30 back in your account.

Once you plug the figures into your budget, you will better understand how much you can spend and where to make changes.

If you buy coffee and a bagel every day at Tim Hortons, can you not make coffee at home and buy bagels at the grocery store?

I did a price comparison of two co-workers, one who bought coffee and ate out for lunch every day and the other who brought it.

The results were astonishing, and they are no different if you are a student.

My final tip for students would be to review your school budget every month and adjust your budget as needed.

Life constantly changes, and so will your school budget.

Discussion: What other financial worries do you have as a student?

Leave your comments below.

Thanks for reading,

Mr. CBB