Tips on "Life Budget" and why budgeting for these costs are important
College Costs

College costs are usually split up into two distinct categories: 

  1. Fees paid directly to the college (billed costs). These can also be referred to as Direct Costs/College Bill usually will include:
    • Tuition & fees
    • Room & Board
  2.  Fees and cost that will not be paid to the college (unbilled costs) but that you will need to budget and pay for out of pocket. These can also be referred to as; Indirect Costs/Life Budget usually will include:
    • Personal expenses
    • Books & supplies
    • Travel

In DecidED you will see these costs listed as College Bill (direct cost) and Life Budget (indirect cost). Once you’ve uploaded your award letter to a college, DecidED will show you the amount left you will need to pay to the school “College Bill” as well as any amount left to budget for under “Life Budget”

Hint: Your Life Budget will include expenses you will need to plan for your upcoming year in college, like personal expenses, transportation costs, spending money, etc.

What are Life Budget Numbers and where do they come from? 

Most colleges provide Indirect Cost/Life Budget estimates on student award letters, and you can often find this information on financial aid webpages. These are estimated amounts based on the average amount a student at that college spends out-of-pocket for personal expenses, books, transportation, housing if living off-campus, etc. If a college does not provide this information, rest assured that DecidED will provide a conservative estimate of these numbers for you to use for planning purposes. This information is critical for your college planning!

Hint: Make your financial plan using the Life Budget estimates provided knowing that you will have the ability to minimize these expenses throughout the year.

  • Instead of buying new textbooks, buy used through Chegg 
  • Opt-out of having a car on campus and instead, take advantage of campus transportation and transit discounts
  • If you have an on-campus meal plan, utilize the cafeteria instead of going out to eat and spending money 

What Exactly is included in a “Life Budget”?

Generally, most students can expect the following costs to be under the College Bill and Life Budget categories:

College Bill (Direct Cost) Life Budget (Indirect Cost) 
Tuition Personal Expenses
FeesBooks, Equipment/Lab Material 
*Housing & Meals (Board)Transportation
*Health Insurance 
*Depending on the student’s housing choices and other circumstances, these costs may show up under College Bill or Life Budget. For the majority of students, these costs will be under Direct Cost as billable costs due to the College.  

Housing & Meals – in certain circumstances you may choose to live at home or live in off-campus housing. When this is the case, housing and meal costs won’t be included in your College Bill. Instead, you will be responsible for managing and paying for expenses such as rent and meals. You will need to plan accordingly since these costs can vary depending on what your personal situation is… 

  1. If you decide to live at home
    • will you be expected to contribute to rent and groceries? If so, plan to account for these expenses under Life Budget. 
  2. If you decide to live at an off-campus housing
    • Will you be renting an apartment by yourself or with roommates, or renting a room in a house?

Have more questions? Check out Housing & Meals Explained.

Health Insurance – most colleges require that you have adequate health insurance. If you don’t have proof of health insurance you may be automatically enrolled in the college health insurance plan, which can range between $1,500 – $2,500 a year. 

If you are already covered under your parents’ insurance, make sure to take the necessary steps to fill out your college’s waiver to avoid health insurance charges! Support may be available at your college in covering this expense so make sure to reach out to the financial aid office to find out more.

Hint: We recommend budgeting $500 for an emergency fund that you can rely on during college for any unexpected expenses that may come up. Remember to refill this fund with earnings from work-study/work overtime if you end up needing to use that money.

What is an “Emergency Fund”? 

An emergency fund is a safety net that you can use to avoid dropping out of college or resorting to taking out more in loans. An emergency fund can help you avoid making rash decisions due to a lack of funds. Even $500 saved in a Checking or Savings account can get you out of many financial emergencies.

If you end up in a financial emergency without an emergency fund, sometimes student support services on campus may have funding available for students so it is important to advocate and ask as well!

Do I really need to have an emergency fund?

An emergency fund is optional but highly recommended. We also encourage students to continue to search and apply for scholarships even while you are in college.

Tip: The best place to keep an emergency fund is in a bank account.

Our team interviewed 90 college students at different college campuses across the country. Here are some of their stories about times when they either used their emergency fund to get out of a tight situation or didn’t have an emergency fund and wished they had one.

5 Moments When You Wish You Had An Emergency Fund 


When Brenda was a sophomore, the belt in her car broke, costing her $200. She needed the car to get to classes and she didn’t have enough money saved up to cover this repair. Fortunately, her paycheck arrived the next day and she was able to get her car fixed without it affecting her ability to get to class. But after that close call, she realized she needed to build up an emergency fund.

“All my money is extra money that I spend so I don’t really have to be spending it and it is just me being frivolous so it just seemed kinda silly all of a sudden and kinda clicked.”

– Sophomore College Student, Brenda

TAKEAWAY: If you depend on a car to get to school, emergency repairs are bound to happen at some point while you are in college.


When Eric was a junior, he broke his leg playing soccer with his friends. He suddenly needed to cover medical bills, couldn’t work at his job in the campus cafeteria anymore (because it required walking a lot), and now couldn’t drive his car, so he found himself sometimes needing to take expensive Uber rides to get places. Eric was a money mentor at his college so he knew it was important to have an emergency fund and had one ready. Through his experience, he realized that small things that aren’t in your control can quickly spiral into big money stress.

TAKEAWAY: Small things that aren’t in your control can quickly spiral into big money stress.


Camilla’s parents grew up in Belize and she was the first in her family to go to college in the United States. She had to figure out everything on her own and she thought her textbooks were covered in the bill she paid the college—she didn’t realize she needed to budget to buy them on her own. She didn’t have an emergency fund, so she had to go to the college’s Financial Aid Office and get a last-minute short-term loan for $300.

“I just assumed they give you the books. I really thought they passed out books because I thought we paid for them… [Three weeks into school] I asked my friend next to me in class when they pass out the books.”

– Freshman College Student, Camilla

TAKEAWAY: You might know that you have to pay for textbooks, but there are likely other things you don’t know. If you are the first in your family to go through the college process, be ready for many surprises. Reach out to support programs designated for first-generation freshmen college students: they can support you!


Deja’s dad’s income increased slightly after her first two years in college so the amount of grants she was given by the school and college decreased. She didn’t realize this until she saw her “refund check”—a check she receives at the beginning of each semester, which she uses to cover books and other college expenses. Her check went from $534 per semester to just $22. Deja doesn’t like to be surprised, so she made a plan to prevent this from happening again. She took out a loan that would cover her books and also left some “wiggle room” for emergency expenses.

“I am very futuristic. I have a whole [financial] plan – it’s in one of my folders in my file cabinet in my dorm.”

– Junior College Student, Deja

TAKEAWAY: Dramatic changes in your family’s financial situation will change your college costs. Having an emergency fund (whether through your own savings or through small amounts of loans) can help.


Between grants and big scholarships, Kiante didn’t have to pay for anything during his first four years at college. However, he changed his major from Psychology to Biological Engineering, which meant he needed to attend college for a fifth year. It wasn’t until the end of his fourth year that he realized all his scholarships expired and would not cover his fifth year at college. He ended up having to take out a $30,000 loan to cover his last year of college and wished he had saved up a little more during his first couple of years of college.

“You have scholarships and they usually cover more than you need. It’s not until you have financial trouble that you start to pay attention…It happens at different times (for different people)… If you want to manage your money, you have to treat it like any other hobby because it is always changing.”

– Senior College Student, Kiante

TAKEAWAY: There are a lot of reasons why college may end up taking you longer than you think. Emergency funds can help you cover the tuition for extra semesters that you weren’t originally planning on. In addition, this is a perfect example of the importance of continuing to apply to scholarships even if you think everything is being covered and paid for!