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Where does the money go? What happens to the missing socks? To one of these questions, you can finally get the answer. The post-secondary years are typically our first experience of managing adult finances—and while that responsibility can be empowering, it calls for conscious planning. Our spending habits have consequences that go beyond our immediate financial dilemmas (“Can I afford to go out tonight?”) and reverberate through our futures. In a recent Student Health 101 survey, 85 percent of student respondents thought keeping a budget would help them better manage their money. These eight steps will get you to a spending plan that will keep you prospering through school and life. (Those missing socks remain beyond the scope of SH101. Maybe try a theoretical physicist?)

1. What is your actual current spending?

“If you don’t know your current spending before creating a budget, you won’t be able to make your budget realistic. You have to know your individual needs to make changes happen with your finances.” —CH

Figure out your average monthly spending

1. Work through your financial statements for at least two recent, typical months. Categorize all your costs. You will probably want to include these categories and maybe others:

  • Education
  • School supplies (including books)
  • Groceries
  • Dining out
  • Entertainment/bars
  • General health & fitness
  • Housing
  • Utilities/cable/internet
  • Cell phone
  • Insurance
  • Transportation
  • Gas
  • Auto lease/loan
  • Shopping/clothing
  • Gifts

2. Add your costs in each category. Try Mint.com or a similar program.

Consider rounding up the numbers: It’s safer to overestimate than underestimate your spending.

Divide your total costs by the number of months you’ve analyzed to get your regular average monthly spending.

3. Identify your irregular or non-recurring expenses, like tuition (if you pay it yourself), car insurance, holiday costs, and vacations.

Add up these annual costs and divide by 12 to get your occasional average monthly spending

4. Regular average monthly spending + occasional average monthly spending = average monthly spending

2. What are your goals?

“Many [students] believe a budget will be limiting, especially if they have limited resources to begin with, but having a current and functional budget is liberating and frees you up to enjoy the wants of your life.” —WB

Identify your goals. Include goals that aren’t strictly financial but have significant financial implications, like going out to eat with friends. How much should you allocate each month to meet these goals?

Examples of goals

Type of goal



How much to spend or save each month


Eat out with friends 2-3 times a week

Above and beyond grocery costs (convenience is expensive)

Spend $200/month


Go to graduate school

  • Tuition
  • Reduced earnings for over 2 years
  • Standardized test fees
  • Application fees
  • Travel for interviews

Save $100/month


Develop an emergency fund to reduce financial stress

Several hundred dollars set aside to help reduce the stress of unexpected events

Save $50/month

3. What money is coming in?

If we lived in a society in which there was no such thing as credit, we wouldn’t be able to claim we can’t live within our income. We would find a way.

Figure out your average monthly income

What are your reliable sources of income? When do they come in? Include:

  • Family support
  • Earnings from jobs (if these are unpredictable, go with a cautious estimation)
  • Student loans
  • Scholarships and grants
  • Any other sources

Add up your income. Round down the numbers if you want to: It’s safer to underestimate than overestimate your income. Divide your total income by 12 to get your average monthly income.

Compare your average monthly spending (step 1) and average monthly income.

4. What do you need? What do you want?

“For most students, the reality is that you won’t necessarily be able to ‘have it all.’ Your cash-flow strategy should prioritize needs while leaving room for some wants.” —WB

“If you have a hard time figuring out the difference between a want and a need, simply ask yourself this question before you buy: ‘Do I need this or do I just want it?’”  —CH

Identify your needs, wants, and spending limit

Identify your needs. These are costs that must be met no matter what, such as tuition, housing, groceries, health care, and transportation to work and/or school. Calculate the average cost of your monthly needs.

Then identify your wants: those discretionary costs. Be realistic. Account for pizza nights, movies, shoes, and Netflix. (Note: You’re not making decisions yet. You’re tracking previous decisions.) Calculate the average cost of your current monthly wants.

If you’ve been overspending, consider how to reduce your discretionary costs (current monthly wants). Figure out your new monthly wants spending limit.

Anticipate temptations and how you’ll handle them. Any successful behaviour change involves planning; consider phasing in these changes over several months. To judge whether or not your plan is realistic, think about what a cut would mean. For example:

  • Go out once a week instead of twice
  • Pack lunch
  • Find free entertainment on weekends

5. What’s your new weekly allowance?

“Convenience has a cost. Cutting out cable, cooking your own food, and making your own coffee are easy ways to cut spending.” —CH

Manage your everyday spending

Divide your new spending limit by 4.5. This number is your weekly allowance.

Consider withdrawing your weekly allowance amount from your bank at the beginning of the week. Once it’s gone…it’s gone. Going cash-only makes it easier to track and adjust your spending.

Think about cash flow. Your income likely isn’t consistent each month. You need money in your account when the bills are due, even though your sources of income are less regular. Some funds, like student loans, are a one-time or two-time disbursement. You may get a large cheque beyond what you need that month; make sure that money is saved to meet each future month’s expenses.

6. What’s your savings account situation?

As a student, you’re not expected to save money for retirement. But you do need to manage your cash flow and prepare for those irregular or infrequent bills.

Use your savings account to manage your spending

When you receive a large payment, like the portion of a student loan intended for living expense, deposit it into your savings account.

Refer back to your occasional average monthly spending—your anticipated irregular expenses (step 1). Also consider any goals (step 2) that require you to save. You will need to hold some funds and make monthly transfers to your chequing account to cover your budgeted monthly expenses or for budgeted occasional expenses as they occur.

7. What’s your checking account situation?

Figure out how much money to transfer to your chequing account each month to cover your expenses. Refer back to your regular average monthly spending (step 1), adjusted to take account of your new monthly wants spending limit (step 4).

Each month, automatically transfer the appropriate amount to your chequing account. This way, your lump sums function like a regular paycheque, so you won’t spend money that you’ll need for future expenses.

Depending on your income sources and how often your money comes in, you will need to adjust the amount you’re transferring. The amount of money available to you for regular spending each month should be reasonably consistent.

8. What’s the easiest way to monitor your progress?

“Track everything! By maintaining a spending journal, you are maintaining an awareness every time you swipe your card, click the purchase button, or drop a wad of cash.” —WB

Keep track of what you spend. You can do this in a notebook, on your phone, or with an app like Mint. Tally or review your spending and account balances regularly: at the end of each day, twice a week, or once a week.

Mint.com: Your most popular tool for planning your spending

Mint.com is the digital program most frequently recommended by students in a recent Student Health 101 survey. It’s a free online tool and app that connects securely to your banks, credit unions, and other financial institutions, pulls the relevant info, and organizes it for you in one place.

Mint.com makes it easy to track your spending and create a realistic, adaptable budget. It sorts your expenses into categories, which you can customize. You’ll need to check and adjust the categorization, especially in the early days. Mint.com can learn your habits over time.

+ How useful is Mint.com?

+ How secure is Mint.com?

How to make a credit card work for you

“A credit card can provide temporary relief if you don’t have the money you need. Developing a habit of using a credit card often is a con, especially if you’re using it for wants instead of needs.” —WB

“Credit cards are great tools for those who use them properly. Pay them off every month in full. If you are a spender, start with a small credit card limit so you cannot get into too much trouble.” —CH

How to use a credit card to establish a credit score:

  • Choose a low credit limit
  • Use the credit card for a regular expense—e.g., groceries—and otherwise leave it at home
  • Pay it off in full every month

Your top 10 strategies for a shatterproof budget

In our student survey, two budget tips were the runaway winners:

  1. Being aware of my bank balance
  2. Realistically anticipating (or overestimating) my expenses

Your top 10 strategies also included:

  1. Tracking my expenses
  2. Taking advantage of student discounts
  3. Sticking to my shopping list
  4. Avoiding places and activities that involve unnecessary or unplanned costs
  5. Having an emergency fund
  6. Using a digital budgeting or finances tool
  7. Using cash, not cards
  8. Paying down my debt

Student Health 101 survey. 1,130 students answered this question

Your favourite online money tools and apps

“Mint: Free, easy-to-use, clean, user-friendly interface. Sign up to use the web app, available to download to your PC, Mac, and smartphone.”
—Tom C., University of Saskatchewan

“I recommend an online banking app, as it is easily accessible on your phone, tablet, or computer, and you always have access to your bank balance and expenditures.” 
—Sydney T., University of Lethbridge, Alberta

“I would recommend that others check out several [apps] and develop their own app to suit themselves. There are no shortcuts that fit everyone.”
—Candace S., University of Lethbridge, Alberta

“I use Microsoft Excel for my budgeting. I found a template online and adjusted it to my personal finances.”
—Diana L., Memorial University of Newfoundland

How to spend less on textbooks: 1. Every semester, go to your school’s library ASAP with your list of assigned books. 2. Find out if your school has a book exchange or book rental service. 3. Taking the same courses as your roommates? Split the cost. 4. Buy used. Ask your professor if you really need the latest edition. 5. Search online for free textbooks. Access is expanding; e.g., textbookrental.ca allows you to rent textbooks at a fraction of the price of purchasing them new or used. 6. Thank your professors for assigning readings that are available for free or at a low cost.

Our experts

William Britton

William Britton, Certified Financial Planner, Marlin Financial Services Inc., Ontario

Caroline Hanna

Caroline Hanna, CIM, Investment Advisor, The Shewfelt McMillan Group at National Bank Financial, British Columbia

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Lucy Berrington is a health writer, editor, and communications manager. Her work has been published in numerous publications in the US and UK. She has an MS in health communication from Tufts University School of Medicine, Massachusetts, and a BA from the University of Oxford, UK.