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Extension > Family > Financial Capability > Basic Financial Education > Youth and Money > Student Resources > Student Resources for College Students and Young Adults > Spending Strategies for Going Off to College

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Student Resources for College Students and Young Adults

Spending Strategies for Going Off to College

Shirley J. Anderson-Porisch, Extension Educator — Family Resource Management

2009; reviewed February 2014 by author.

When asked how to make good decisions with money, I start by taking a look at spending. I suggest you have this spending conversation with your college-bound student.

Questions to Ask

Even though we may not always consciously ask and answer, every spending decision involves questions: What’s the issue? What are the options? What are the pros and cons of each option? Which option will I choose? Will I choose that option in the future? Asking and answering these questions when making a decision should result in a positive solution.

College students who make decisions with money using the questions as well as a plan will likely be able to stay in control of their finances. The plan should show available money for spending or income, and obligations of that money or expenses. Making good decisions with the expense side of the plan will likely keep income and expenses in balance.

Sample Scenarios

To illustrate that point, let’s look at some common spending scenarios for a college student. Each scenario describes a plan based on the best option for the spending decision.

A common source of college student income is a loan for living expenses. In this example, the student has a living expense loan of $2000 to cover five months of paying rent and food expenses. The plan suggests using $400 to cover monthly rent costing $250 and food costing not more than $35-40 per week. Spending at these levels would insure that the $2000 lasted five months.

Another common source of college student income is a job. Let’s say a 20-hour per week job paying $8.00 per hour provides about $480 net monthly income. The plan suggests $480 cover gas for the car $100 (about 3 fills per month); car insurance $80; cell phone $75; clothes $50; personal care $50; entertainment $125 (about $30 per weekend). Spending at these levels for gas, car insurance, cell phone, clothes, personal care, and entertainment would insure that a $480 net income would last for one month.

Balancing Act

So what if a student’s plan for spending decisions is out of balance? Here are three strategies for any situation:

Increasing income is not always the solution — more income usually means more spending!

Any college student will do well with their spending decisions if they

Planning for spending decisions during the college years may well last a lifetime!


Anderson-Porisch, S. J., Heins, R. K., Petersen, C. M., Hooper S. E., & Bauer J. W. (2009). Dollar Works 2: A Personal Financial Education Program. St. Paul, MN: University of Minnesota Extension.

Wants Versus Needs

Rosemary K. Heins, Extension Educator — Family Resource Management

Reviewed June 2013 by the author.

Before you go to the mall or a favorite online store, understand the difference between wants and needs.

If it’s possible to delay buying an item, substitute something less expensive, or to use something you already have, the item is probably a want. Almost every experience and activity, from after-school sports to "shopping therapy" is a want. There are alternatives to eating out, going to the movies, cable TV, cell phone ring tones, text messaging and new clothes bought just because they’re the new style.

The good news is that the cost of "wants" is completely within your control and you can choose not to spend money on these activities and things.

Needs on the other hand are purchases necessary to survive. They are the "gotta haves." Needs are the items or costs you need to live like a rent or mortgage payment, transportation, utility bill, food and basic clothing.

Even within this category, however, are different levels of wants and needs. For example, a car is the most convenient form of transportation but a good, used car will fulfill and "need" but a brand new car will be a "want."

Before you buy something, ask yourself, “Do I need this item, or do I just want it?” You may be surprised at how many things are actually "wants." Identifying what are "needs" and what are "wants" can be valuable to gaining control of your financial situation.

Planning for Non-Monthly Expenses

Rosemary K. Heins, Extension Educator — Family Resource Management

August 2009, Updated October 2013.

Paying for non-monthly expenses, like vacations, holiday gift giving, back-to-school supplies, or vehicle license tabs can be a challenge. Saving for these future expenses is key to success in making a spending plan work.

Unfortunately, in many households other expenses come before saving money, even for something that will come up in possibly three months. So how much should you save? You need to determine this based on balancing your income and your expenses.

Let me explain further. We usually know or have a good idea what a monthly expense will cost, like a house or rent payment or car loan or utilities. There are also non-monthly expenses such as birthday/holiday gifts or a vacation.

Let’s use an example of one expense, December holiday gifts and expenses. Jot down your anticipated cost first. Let say it’s $400 and it is now August. To be ready for November/December gift purchasing and parties, one needs to start setting aside $100 per month in August. However, if this was planned for in February, only $40 a month would need to be set aside for holiday costs.

Ideally, a person jots down all non-monthly expenses for a year, adds this up and divides the total by 12. This becomes a monthly set-aside saving amount that can be part of the monthly spending/saving plan. This could be kept in a separate savings account. When one of these expenses comes along, money from this account is used to pay for it. Money leftover is left in the account to help pay for extra expensive months.

Setting spending target goals and determining how much to set aside, based on the time available to save, make paying for non-monthly bills easier and less stressful.


Dollar Works 2 materials, Action Page 4-6

Related Resources

Financially Speaking: Parents, Let's Talk College Finances — How to talk with your child about the financial aspects of college.

Wants Versus Needs — Before you go to the mall or a favorite online store, understand the difference between wants and needs. Transcript and audio (1:48)

Planning for Non-Monthly Expenses — Learn to set spending target goals and determine what to put aside for unplanned expenses. Transcript and audio (1:59)

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