indicatorStudents Education and RESPs

How to budget your income as a student

By ATB Financial 18 January 2023 4 min read

There are many ways to pay for your post-secondary education, whether you take on a part-time or summer job, apply for student loans, use an RESP or get a scholarship. No matter how you’re paying for school, here’s how you can make the most of your income now, so you can set yourself up well for when you graduate.

Step 1: Assess your immediate expenses

Creating (and sticking to) a budget is a simple way to take control of your money and make it work for you. Start by adding up your basic expenses for the whole year—include tuition, books and supplies, groceries, recreation, transportation, rent, phone and internet, etc. We’ll call this number your immediate expenses. Keep the breakdown of expenses by category handy for step 3.

If you don’t already have a budgeting worksheet, we’ve created one for you. You can access it here.

While you may have a pretty clear idea of what your cost of living and studying will be on a year-by-year basis, life is full of surprises. That’s why it’s important to build up an emergency fund as a financial cushion for when you need it. The rule of thumb is to set aside enough to cover your basic expenses for between three and six months.

Need some help keeping track of your expenses? ATB TrackIt automatically records and categorizes all of your income and expenses, since it’s built into both our online and mobile banking platforms. It’s an easy to use way to track your money.


Step 2: Assess your current income

Now that you know your immediate expenses and how much money you need to create an emergency fund, it’s time to figure out how much money you’re currently bringing in.

Start with your earnings from any paid work you plan on doing during the year. Add any savings you, or your parents or guardians have set aside for your education (including but not limited to savings in an RESP). Add any scholarships, bursaries or government financial assistance you’re expecting. We’ll call this number your current income.

If your current income isn’t enough to cover your immediate expenses and set up an emergency fund, it may be time to apply for a government student loan or a student line of credit.

If your current income exceeds the amount you need to cover your immediate expenses and set up an emergency fund, you can look into investing the extra amount with ATB Prosper. It’s a super simple way to start saving digitally, so you can afford the things you want in the future (whether that’s your own place, a new car or a dream vacation).


Step 3: Put your budget to work

Okay, so you know how much you need and how much you have to work with. Now it’s time to figure out how to make your budget work in real life.

Don't forget RESP and student loan funds

Make sure that you keep track of any money that’s going directly from your RESP or a government student loan to your educational institution. Even though it may not feel like “real” money because it never passes through your personal accounts, it’s still part of your big-picture calculation.

Manage different income streams

If you have income from several different sources—some of it coming in bi-weekly or monthly, some every semester, some only once a year—you can open up different savings accounts for different types of expenses. 

For instance, you could have one account for tuition, one for groceries, one for rent, one for transportation or vehicle expenses, and one for your emergency fund. Every time you receive funds from one of your income sources, you can take a look at your account balances and your breakdown of expenses for the year, and put the money where it needs to go.

Pick the right account

Choose savings accounts that aren’t charged monthly fees. Because most savings accounts have limits on the number of debit transactions you can perform without being charged transaction fees, we recommend having a chequing account with unlimited transactions that you can transfer money into when you need to make purchases.

Earn extra as you spend 

No matter how much or how hard you want to save, spending is essential. When you do have to spend, look for opportunities to get the most out of your hard earned money. There are banking products and apps that allow you to earnwhile you spend—like rewards credit cards, or apps like Rakuten and Honey. Plus, many stores will offer student discounts if you show your student ID.

Invest the rest

Dividing up your income as you receive it makes it easier to see where your money is going, but it also makes it easier to notice when you have a little extra that could benefit future you by being invested in a tax-free savings account (TFSA).

Once you’ve covered your basic costs of living, saving a portion of everything you bring in is a good habit to get into, even now. In the future, the money you’ve invested can be put toward paying off your student loans, putting a down payment on a house or a car, or giving you some time off to figure out your next steps post-graduation.

When you set up a basic budget, track your expenses and income, and save what you can, you’re taking small steps that will allow you to be more independent and confident with your money now and after you graduate. Want more good advice to support your post-secondary journey? Check out our resources curated for Alberta students.

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