01 Apr Insights on How Students Approach Budgeting

Written by: Tanya Tanaro, Manager, Higher Education Partnerships, American Student Assistance- SALT

As financial aid professionals, we want to help our students and recent graduates financially succeed over the long haul. Students who are more in control of their finances increase an institution’s retention and completion rates because they are less likely to drop out due to financial strain; likewise, they’re less inclined to suffer academically if they’re not constantly worrying about money. Students who learn how to budget during their college years, meanwhile, become older alumni who can manage their loan repayment, which makes them less likely to feel resentful about the debt they incurred for their education, and more likely to one day give back to their alma mater.

So while developing students’ financial capabilities is the natural tendency of the financial aid officer (it’s in our blood!), it also brings some pretty important benefits to the institution’s bottom line. But as every financial aid office knows, it can be incredibly hard to engage with students on money matters. To do so effectively, we must first understand our students’ mindsets.

Through a series of focus groups, surveys, discussions, and web chats with students and recent graduates, my organization has gleaned numerous useful insights about students’ thoughts on finances and debt.* Recently, we asked students for their take on budgeting.  We learned that this topic elicits a range of emotions for our members, from hope and determination, to disappointment, depression, anxiety and fear.


Much of the emotion is due to being uninformed and overwhelmed. Many shy away from budgeting because they simply don’t know how to begin, especially those who may be starting out on their own for the first time during/after college.

Some think budgeting will require too much time and energy for too little return. Those living paycheck to paycheck often don’t see the need, since little is left over after paying for necessities, and others are present-tense focused, meaning they aren’t often planning ahead or saving for the future.

Others find it too scary and depressing to look at their financial big picture, so they avoid the issue altogether: “Does anyone else have the issue where money just gets away from you?” said one SALT member. “Seeing my credit card statements and my bank statements is literally a pain and a major source of anxiety. My budgeting skills are clearly lacking. I have a spreadsheet (so at least I don’t overdraw), so I know what I owe to where, but for some reason I just can’t get it together.”

Still others try their hand at budgeting but set such unrealistic saving and spending goals at the onset, they’re frustrated when reality doesn’t meet their expectations. Meanwhile, students or alumni with spouses/partners face a whole different set of challenges when the couple’s not on the same page about budgeting shared finances.


There are numerous online resources and budget worksheets you can share with students to get them started, and many are showing positive results in changing students’ attitudes. For example, 73 percent of the users of one of our own lessons on budgeting reported they planned to continue tracking their expenditures and income.

Another great piece of budgeting advice you can impart is that it’s not a one-size-fits-all exercise. The term is widely interpreted – even among those who do successfully keep a budget, there is variation in what they track and how frequently they update their finances. Some want to track every penny, while others want a bird’s eye view of trends over time in order to find opportunities for improvement.

Explained one focus group participant: “I don’t keep a formal budget, but when I get paid I pay the bills I need to pay with that check right away. Then I put some in savings. And I try after that not to go less than a specific number in my account depending on how much is in there at the time. Keeping a formal budget seems too complicated.”

The trick, then, is to help the student find the budgeting method that’s right for them. You also need to teach your students budgeting’s not about perfection or deprivation – it’s about persistence. Universally, those who did a budgeting project with us over the course of two months found the experience worthwhile, even if they made some mistakes along the way.

Along those lines, here are some ideas on making budgeting top of mind throughout the year, helping students both in the moment with their current stressors and in preparation for the months ahead:

January to March:

  • Take advantage of the post-holiday season, when many students are looking to rebuild savings and feel motivated to start the new year on a good note, to disseminate budgeting how-to’s and motivational material.
  • Offer resources on how to make the most of tax returns.
  • Help students budget for upcoming travel (spring break/summer vacation).

April to June:

  • Help students plan a summer job or internship to bring much needed income and motivate them to use their time away from school to get organized financially.
  • Provide guidance on managing that first full-time paycheck.
  • Offer how-to’s on setting up a budget to help make the most of their income.
  • Help students budget their income and expenses over the summer in order to save for the upcoming school year (tuition, books, travel, moving costs, etc.)

July to September:

  • Ease the stress of a new semester (and likely reduction in income) with budgeting how-to’s and money saving tips
  • For alumni in their student loan grace period, offer material on loan repayment and incorporating monthly payments into a budget.

October to December:

  • Remind students to plan ahead for gifts and/or travel, and offer tips for buying gifts on a budget.
  • For alumni who are repaying loans, make it seem less overwhelming with actionable resources such as worksheets and calculators.
  • Encourage students to get a head start on budgeting New Year’s resolutions.