When you sit down to make your budget, look at your overall income, including any scholarships, grants, parental contributions, and whatever you may make working. Avoid taking out student loans unless you have no alternative, as loan repayment can be a hardship for young graduates. Since many students are on a tight budget, you may find zero balance budgets, like the envelope system, a good option. Regardless of how you choose to budget, you should be certain to account for both necessities like food and housing and savings in case of an emergency.

The first, and often most expensive budget item for many students is housing. If you live in the dormitories, this may not factor into your budget, as your parents, scholarships, or other financial aid has likely paid it. If you live off campus, you will need to pay your housing expenses, including both rent and utilities. Most college students need to share an apartment or house to reduce expenses. Choose reliable roommates, and sit down with them regularly to discuss household expenses.

After housing, many students' next major expense is food. If you live in the dormitories, you likely have a meal plan that covers some of your food expenditures. Many campus meal plans allow you to make sandwiches or salads to take for lunch, and these options can help you to save on food. Learning some basic cooking will also help you save on your food expenses. Set a reasonable food budget, and prepare healthy and affordable foods at home whenever possible.

For many students, the next budget expense is entertainment. Movies, concert tickets, and cover charges for bars and clubs all fall under this heading on your budget. Be fair and honest when planning your budget, and keep in mind any free entertainment options available on your campus or in town. This budget item may have the most flexibility, and if you need extra money, it may be what you can sacrifice to cover other expenses.

The flaw for many students is that the spending items exceed the income available. Unfortunately, many students opt for credit to fill in these gaps. That strategy may result in long-term credit problems. While the easy access to credit on most college campuses can allow you to build up a good credit history, more often than not you will find yourself running up excessive debt that you may not be able to repay.

What can you do if your spending needs exceed available income? First, see if spending can be cut anywhere, and consider keeping a spending journal to track any spending of which you may not be aware. Cups of coffee, a candy bar grabbed at the gas station, and other dollar here and dollar there type spending can add up significantly. If that is not sufficient, consider reducing your housing costs, working more to bring in more income, or reducing other spending. Living off campus is often more expensive than living on campus, and if you attend college near your parents, living at home is more affordable yet. Learning to live within your means is not a pleasant or easy lesson, but it is one that will serve you well.