How to Budget as a Student: Back to School Money Tips for the Year Ahead

Heading back to school means being in charge of your finances, which makes now a great time to get a head start on your student budget.

Wondering how to budget as a student in Canada? Whether this is your first time making a budget or you’re just brushing up, this student finances guide can help you prepare for the coming semester.

1. How to start organizing your money

You may have a lump sum coming your way – like an OSAP grant or loan, bursaries or other student loans. If your funding doesn’t automatically get sent to your school, look at how much you’ll need for tuition each semester. Also, take stock of any savings, summer job money and scholarship awards that can help you cover your school expenses.

You can also estimate any income you’ll earn over the year – from part-time jobs or side hustles – that can help pad your monthly student budget.

2. How to plan for monthly expenses

Once you have a sense of what’s coming in every month, you can sort out what will be going out. Think about monthly expenses like a phone bill or subscriptions, as well as once-per-semester costs such as tuition and textbooks.

Then, figure out your budget for the rest of your needs:

• Food — if you’re not on a meal plan

• Transportation – to get around town and campus

• Essentials – like laundry and toiletries

• Some personal or discretionary spending — if you have room for it

3. What student savings strategies actually work?

Now that you’ve estimated what your monthly expenses are, figure out what you need to set aside from OSAP or other student loans, and what you’ll have left over.

Since you’ve gone ahead and calculated your monthly budget, you can now look into maximizing it. Can you find ways to have money left over at the end of the month?  Things like eating out less, finding a more affordable phone plan and limiting non-essential spending can help you add room to your budget for savings and emergencies. Other student savings strategies include taking advantage of student discounts, teaming up with others on the grocery bill and walking or cycling to class instead of driving or taking transit.

4. When does it make sense to invest leftover money?

If you’ve got money left over after your expenses, you could give it the opportunity to grow – and help pay back student loans faster after school. Here’s an idea: Save what you don’t need this semester in a high-interest savings account. Your money will earn interest and grow for as long as you save it. Or if you’re comfortable, consider an investment account that could give your money the potential to grow faster.

5. Can you stay on top of your budget?

The answer is yes! While it can be easy to lose track of your spending or forget to check your budget while you’re busy at school, there are ways to make it easy on yourself. With the RBC Mobile app, it’s super simple to stay on top of your account balances and bill payments from anywhere. And thanks to NOMI, the app’s AI-powered money management tool, you can track your spending, monitor a personalized budget and see what your money is going to do next – without having to do any of the heavy lifting yourself.

FAQs

How much should I budget monthly as a student?

The amount of money you need as a student will depend on several factors – like whether you’re living in residence, in off-campus housing or at home with your parents. A good rule of thumb is to add up your essential expenses – like rent, utilities, groceries, transportation and education costs and divide that amount by 12 to get a monthly average. Then factor in discretionary spending – things like eating out, entertainment and travel. If you can, try to carve out 5-10% for savings or an emergency fund.

What counts as variable versus fixed costs?

Fixed costs stay roughly the same each month – like rent, phone bills or a monthly transit pass. Variable costs can fluctuate – think groceries, clothes, eating out or other social activities. Knowing which costs are fixed helps you plan, while keeping an eye on variable costs can help you find areas to cut back when money feels tight. 

Should I invest while I’m a student or focus on repaying debt?

It depends on your financial situation. If your student loans have low interest rates (like government loans), it may make sense to invest a small amount regularly to build the habit of saving and take advantage of earning compound interest.

If your debt has a higher interest rate (like credit card balances), it’s worth focusing on paying that down first. A balanced approach that involves making minimum payments on low-interest loans, while contributing small amounts to a TFSA or savings account, can give you flexibility when you graduate.

How can I avoid overspending each month?

Set a weekly spending limit for variable costs and track your spending in real-time (the RBC Mobile app1 can help you do this). Then, break down large expenses like textbooks into monthly savings goals so they don’t throw your budget off when they come due.

What are some easy ways to save as a student? 

Look for student discounts on transit, software, streaming services and groceries. Buy used textbooks, seek out cheaper digital options or borrow from the library. Cooking meals at home and sharing costs with roommates can go a long way toward your food budget! Even small habits, like making coffee at home, can free up extra cash over time.