Are you planning to head back to your university town this fall? Even though your classes might be online, you still might be heading back to live off campus this year and that means, it’s time to start thinking about your back-to-school housing budget.  

The word “student" and “budget" tends to go hand-in-hand and for good reason. University students living off campus for the first time are notoriously cash-strapped, unable to work full-time and yet are required to pay large sums of tuition along with general living costs, often for the first time in their lives.

All these things that used to just happen - the lights going on, the hot water in the shower working, meals appearing on the table for dinner - turns out, they cost money, a lot of money. It's now to you to manage your cash flow.

And that's a good thing and so essential to set good foundational money habits that will see you through decades.

Luckily, there's plenty of people who have gone through it before and there exists a wealth of knowledge on how to set a proper budget when you live off campus.

We're going to walk you through some of those tips.

What should a student budget include?

The first part of budgeting is knowing what you spend.

The first thing you should do is open up a student bank account with a debit card and consider getting a student credit card. If you do get a credit card, which can help you build up your credit history, make sure you pay your bills on time each month so that you aren’t paying extra in interest.

When you use a debit or credit card instead of cash, you'll be able to track your expenses and analyze what you're actually spending on every month. If you try to remember what you are spending without a record, it’s really easy to forget.

And you may be more likely to cut back on ordering in your dinners if you realize you are racking up hundreds of dollars a month on your favourite foods.

The first year will be difficult as you may not even realize how much you spend or how much money goes into everything, but if you use this technique by your second year off-campus, you’ll have much more awareness and be able to create a much more accurate budget.

For now, know that a student budget needs to include everything you need to live for the school year (or full year if you are living there during the summer). Here's a few things that you'll have to account for:

  • Housing
  • Hydro
  • Heat
  • Tenant's insurance
  • Food
  • Entertainment (ex. streaming services)
  • Tuition and books
  • Transportation (a bus pass and a few taxis or ride shares most likely, otherwise gas, insurance, car payments, parking etc.)
  • Travel home (bus, train or flight tickets)
  • Haircuts
  • Toiletries (shampoo, makeup, soap etc.)
  • Cleaning supplies
  • Home decor (curtains, a bed, other furniture if you don't have)
  • Moving in and out expenses

You can estimate these expenses or ask a few older students the averages of these in your area. Add a 10% buffer.

Look at what you will be needing to spend each month, if that number is looking too high, then you’ll either need to get a part-time job to make up the difference or start cutting expenses.

Sharing common expenses

By far the best way to slash your overall expenses from the start is to share common expenses. Most students find it's simply too expensive to live alone and be responsible for all aspects of housing.

Since the biggest line item in most people's budget is rent or housing, by far the easiest way to spend less every month is to find a roommate - or three- to split rent with. You won't have to skimp as much on take-out coffee or entertainment if you're paying as little rent as possible. It's an easy way to save hundreds of dollars in one stroke, as opposed to cutting $5 off smaller expenses here or there. And by sharing rent, you'll also be splitting tenant's insurance, hydro, heat, and the effort of furnishing your place.

You'll have to decide together the best way to split utilities — will you be splitting it evenly or making roommates who use more pay more? It's pretty difficult to determine the exact amount of hydro someone is using, so it's probably best not to haggle over it too much. Unless someone is blasting their electric heater all day and night or has a substantially larger room than everyone, just split it evenly.

But whichever method you choose make sure all roommates are committed to the plan.

How to avoid the pitfalls of living with a roommate

As much as we recommend finding roommates to live with as the single best way to save money off-campus, we know that it can sometimes be a struggle to actually live with them. That's why it's essential you pick the right roommate(s) from the outset, and then develop house rules.

The easiest way to avoid the pitfalls of living with a roommate is to choose the right roommate in the first place. You'll want someone:

  • Who has roughly the same schedule as you: If you are a morning person, don't move in with a bartender.

  • Who has the same attitude towards school as you: If you're there to get straight As, then don't move in with someone who's there for the social aspect.

  • Who is reliable about their finances: Don't move in with someone who can't give you or the landlord pre-dated cheques or who refuses to discuss how to split utilities with you.

  • Isn't necessarily your best friend: Moving in with your best friend may sound great, but living with someone has a tendency to strain the relationship. It can be easy to get annoyed at things you would never have noticed if you hadn't shared a bathroom with them for a year. It can be easier to find a roommate that you get along with but aren't especially close with to avoid any drama.

Either way, living off-campus for the first time is a learning curve. You won't do everything perfectly your first year, but you'll learn valuable skills that will allow you to launch into the real world.

Ready to get your finances on track for your future? Come in and speak to a Scotia advisor today