How to Use YNAB to Budget as a College Student

From Just Paid to Financial Aid


Ahh…college. The ultimate crash course in Adulting 101. You probably sashayed onto campus feeling triumphant at first—you’d made it. You escaped high school. You had your schedule and your room assignment and a general idea of what was going on. Nothing left to do but party—er, I mean study. Very diligently. 

But let’s be real, I doubt you sashayed. That would be pretty weird but, admittedly, also kind of awesome. And your general idea of what was going on probably started to feel less within reach the more you realized how much is going on.

(Spoiler alert: that uncertainty continues for the rest of your life for many of us. Welcome to the “Am I An Inadequate Adult?” club.)

Yeah, you know how to use your meal plan (maybe?) but financial aid and student loans and prerequisites and electives and finding a job and internships and paying bills and, oh, that little matter of committing to an area of study to work in for the rest of your life when you don’t even know what you want to watch next on Netflix. It’s a lot. 

Luckily, college students are renowned for having fat stacks of cash and can hire a personal assistant, life coach, and financial advisor to help with all of that. Just kidding. You’re probably broke on top of it all, even if your parents are helping out. 

There’s a lot to learn. And not just within your chosen major. 

YNAB can’t help with what to watch on Netflix or which career path to pursue, but we can help you build a solid foundation for your financial future, and that’s no small thing. Developing good habits around spending and saving now (yes, before you have much money) can set you up to have the freedom to make choices about your life and career that you may not otherwise be able to afford. It can also keep you out of trouble. 

In a way, your budget is a lot like a life coach, it just won’t bug you to start meditating or ask you to keep a gratitude journal. That’s on you.

So, first things first, get your free year of YNAB, and then let’s talk about how to use it. 

You Are Not A Loan 

When that financial aid hits your account, it’s tempting to look at it as income. All of your problems seem temporarily solved! If some of that money includes student loans, as it likely does, your problems are just quietly snowballing—Future You is going to get ambushed if you’re not careful. 

“Eh, Future Me isn’t really a ‘me’ problem. That guy sounds boring anyway,” is a tempting road to travel. DON’T DO THAT TO FUTURE YOU. Future You may want to buy a home, invest in the next Apple-like start-up, travel the world, or send a houseful of kids to private school. 

Future You is going to look back on Current You chillin’ like a villain on loan money and—I’m just saying—you’d better hope time machines aren’t a thing by then.

Eat the ramen. Shop at thrift stores. Find cheap fun. Live within your budget. Future You wants options that are more appealing than a night out that you’ll still be paying for years from now. 

(Psst…Future You is actually pretty cool.)

How to Budget as a College Student

So, YNAB is both a mobile and web app, but there’s also a method to our money-managing madness. And it works! Think of our Four Rules as your syllabus to success. 

Rule One: Give Every Dollar a Job

The first rule of Fight Club…oh wait, wrong crowd. Anyway, the first, and I’d argue, most important step of setting up your YNAB budget is to Give Every Dollar a Job. Think of it like spending your money before you actually spend your money—it’s actually oddly fun, like the gamification of divvying up your dollars. 

So, you look at how much money you currently have and you make specific decisions about how you’re going to spend every dollar of it. When you first get started, this may seem a little stressful if you have more jobs for your dollars to do than you have dollars to do them, but that’s why you prioritize your upcoming expenses based on necessity and due dates until you have more dollars. 

Your first category group usually covers Immediate Obligations (although you can restructure your budget however you’d like) and may include costs like rent, books, cell phone, transportation, and any non-meal plan groceries or household items. Other category groups would cover categories that would fall under True Expenses, Debt Payments, Fun Money, and Quality of Life goals or whatever else you want. 

Sample categories for a college student budget.
Sample categories for a college budget.

But the goal is to keep your “Ready to Assign” balance up top at zero, because all of your dollars are always assigned. You’re less likely to waste them if you know how you actually want to spend them. 

If you have student loan money, it may be wise to set that amount up as a separate account in your budget and work hard to assign those specific dollars to their intended jobs, like tuition, housing, books, and a meal plan. Don’t fall into the trap of taking Sallie Mae to San Jose on Spring Break! 

Rule Two: Embrace Your True Expenses 

Surprise expenses are an unfortunate fact of life. But when you really think about it, most of them aren’t all that surprising. At some point, your car will need repairs. You might get pushed into a pool with your iPhone in your back pocket. Christmas comes every year at the same time; birthdays too. Our car insurance premiums? They tell us when we’ll have to pay them yet somehow they’re popping up out of nowhere like a scary clown in a sewer. Very upsetting. 

Instead of pretending to be shocked every time one of these not-so-unexpected things happen, go ahead and plan for them. Take your large expenses, estimate how much they may cost, divide that number by 12 (or however many months it takes for those costs to reoccur), and set money aside each month so handing that lump sum over hurts a little less. 

Accounting for your True Expenses requires some realistic thinking. How long is your laptop actually going to last? (Hint: not forever.) Start setting aside small amounts of money each month so that you can replace it guilt-free and with cash when it finally retires to the tech graveyard.

The progress bars help you budget as a college student by allowing you to visualize your spending and savings targets.
The progress bars help you visualize your spending and savings targets.

YNAB’s spending and savings targets can help you visualize your big goals as smaller, more manageable steps…and will greatly reduce your mourning phase when big ticket items bite the dust.

Rule Three: Roll with the Punches 

Circumstances change. Mistakes happen. That’s life. 

So you accidentally spent some of your car payment money on concert tickets. Oops. Now what? Hang your head in shame? Stop budgeting forever because you’re bad at it? No and no. Just figure out how to cover it. 

Remember that carnival game where the little moles would pop up randomly and you’d bop them back down with a comically-oversized mallet? It’s called Whack-a-Mole and we’re huge fans of that here. We call rearranging our budget to cover our changing needs WAMing. 

You may have to borrow a little from your Spring Break 2022 fund and you might have to zero out your pizza delivery category for the month, but you can still try to pay the car payment and enjoy the concert by covering your overspending from money you’ve already assigned elsewhere. 

Rule Four: Age Your Money 

Once you start paying attention to your money, you’ll probably start spending less each month as you become more intentional about your dollars and their jobs. Eventually, you’ll have enough money to assign some to next month’s categories. And that’s the goal. 

Once you’re a full month ahead on bills, you’re no longer living paycheck to paycheck. Creating some breathing room feels good!

Looking for additional tutoring on setting up your YNAB budget for the first time? Check out this helpful video about getting started

Future-Proofing Your Life 

Here’s where we’re gonna get all Life Coach-y on you, guys. Once you get your budget established, there’s a good chance that at some point you will have some extra dollars waiting for jobs. It might just be a few dollars, like a small check grandma sends for your birthday. And you might notice that you’re a month ahead and your expenses are all covered when you go to give these dollars jobs. 

Now what? Now you really get to put your money to work for you. The sky’s the limit—even if you don’t have all of the dollars to make your dream come true right now. 

You could start a $1000 emergency fund. You could work on a Wish Farm. You could throw some more money towards a car replacement. You could start paying down your student loans. You could plan for future travel. You could save for an engagement ring—hey, maybe one of those Tinder dates will finally work out. Set up a spending or savings target and get to work on achieving your goals. Even if that goal is just about buying an Xbox. 

You can do whatever you want within reason and without guilt because you’re building something with all of this budgeting you’re doing. 

And that’s the point of budgeting. 

You’re leveling up Future You so you can be better prepared for the Boss Battle of adulthood. 

You won’t be eating those dollar store packets of ramen forever. Unless you want to! We’re not knocking comfort food—and cooking at home means more money for the important stuff in life, like replacing that water-logged iPhone.  

Ready to get started? Take advantage of YNAB’s free year for college students and start giving jobs to your dollars.