Tips for students on planning a budget for the first time

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For first-year students, the start of a new academic year brings myriad opportunities—new classes to take, new friends to make, a new campus to explore. But these new experiences bring some challenges for students, too, including managing a personal budget for the first time.

Balancing the cost of bills, rent, groceries, books, and still having some funds to have a little fun can be a difficult assignment. Here are a few tips from the university’s Center for Financial Independence.

First, figure out your cash flow

Anya Ilkys, director of student financial literacy, says establishing a tally of income is the first step to any budget planning.

“We’ve had students come in here and say, ‘How do I budget when I have no money?’ but the truth is, oftentimes you do have money coming from somewhere,” she says. Funding sources like a paycheck from a job or a set of odd jobs; money from family; savings; or a financial aid refund all go into this list.

“You want to take a really good look at where the money is coming from,” Ilkys says. She notes that students who are counting on a paycheck should budget with the net amount in mind, not the gross amount. “Make sure you take into account taxes that will come off the top,” she says.

Set goals

Next, Ilkys recommends setting a series of short-, medium-, and long-term financial goals. Short-term goals should generally be attainable in one to two years; medium-term goals in two to three years; and long-term goals in four to five years.

“Try to align your thinking about where you want to start saving now in terms of accomplishing those goals,” Ilkys says. “Basically, you need to figure out what you want your money to do.”

Factor in the fixed costs

When budgeting, students should set aside money for known expenses like rent and bills first, Ilkys says. Then, they should set aside an amount toward those financial goals.

“Then, and only then, can you assess discretionary funds,” she says. “A lot of students will do it in reverse order: they’ll get their paycheck and spend half of it that weekend then say, ‘How can I stretch this to cover what I need?’ That’s now how you want to do it.”

Anticipate what’s on the horizon

When plotting out a monthly or even weekly budget, Ilkys says students should be aware of any upcoming events, including holidays and birthdays. “If you have that in the back of your mind, you can start putting aside money for that a little at a time.”

Likewise, if there’s a particularly big expense coming up—like needing to purchase a plane ticket to fly home for the holidays—Ilkys recommends setting up a separate space for that in your personal budget.

“If you don’t start putting money aside, you’ll always feel like you have it to spend,” she says. “This way you physically won’t have it to spend.”


Though everyone’s finances will be different, Ilkys says a general rule when it comes to budgeting is 50/20/30: Dedicate 50 percent of your total amount for fixed expenses such as rent, utilities, loans, etc.; 20 percent for savings and short/long term goals; and 30 percent for variable expenses or discretionary funding.

Be flexible

“We hear a lot that a student overspent in certain categories in his budget, then will come in and say, ‘I just don’t think budgeting is for me,’ and that’s not true,” Ilkys says. “You just have to roll with the punches sometimes; you can always scrap your budget and start new.”

The most important part, Ilkys says, is to stick with the process. She also recommends online budgeting sites like and as places to make flexible budgeting easy.

Treat yourself

Like a diet, budgeting is generally more successful if you allow yourself a treat every once in a while, Ilkys says.

“If you’re really stringent on your budget, if you never have room for fun and entertainment, if you don’t put money aside to enjoy life, you’re more likely to say that it’s not working out,” she says.

Ilkys says she keeps a “random” category in her personal budget for spur-of-the-moment expenses or entertainment.

Fun without breaking the bank

In a city such as Boston, where there’s so much to do all the time, it can be easy to spend too much money in a single weekend. It can be just as easy, Ilkys says, to find things to do that won’t break the bank. She recommends the site for interesting free or inexpensive events.

The nuts and bolts

Where, exactly, do you put the money you’re saving? It depends. Ilkys says this is generally the most personalized part of designing a budget.

One option is to keep everything in a checking account, but keep an eye on your budget to know exactly how much of that you can spend and how much you should be saving.

Some students will also physically withdraw the exact amount of discretionary funds they have for the week, so once they run out of cash, they know they’ve spent as much as they budgeted.

“That takes a lot of discipline,” Ilkys says.

Another option is to set up different savings accounts through your existing banks. Ilkys recommends giving them specific names like “Trip to Aruba” or “Textbooks for spring semester.” That way, there’s an emotional attachment to the money in those accounts and you’re less likely to draw from them early.

A third option is to open online savings accounts that don’t require a physical debit card to withdraw money. Often there also is a time delay on these accounts between when you submit a withdrawal and when the money is available. This deters impulse spending, Ilkys says.

Here to help

The Center for Financial Independence offers free workshops each semester that focus on a variety of financial topics. On Oct. 12, the center is offering “Mind the Gap,” an interactive exercise that helps players visually identify their financial goals, map their spending, find gaps between the two, and plan accordingly from there.

The center also offers free one-on-one financial advising for all students as well as walk-in sessions during the week.