Starting a graduate program is an exciting time for many students, but it’s often accompanied by challenges that go beyond the new course material.

Not only is graduate school expensive, but some students may already be managing debt from an earlier degree. Grad school student loans also come with fewer perks than undergraduate student loans, which can exacerbate the financial burden of further education. There are also opportunity costs if your work options are limited while you study.

That said, there are steps anyone can take to lessen the financial impact of graduate school. Learn what you can do to keep graduate school debt to a minimum, along with steps you can take now to prepare for your financial future after graduation.

Planning a graduate student budget

No matter what type of budget you plan to use, whether it’s written or app-based, there are several factors to keep in mind. These include your income, or the amount of money you typically bring in each month, as well as your fixed expenses and variable expenses. Using a student budget calculator can help you get a sense of how your expenses add up.

Fixed expenses are bills that typically do not fluctuate on a monthly basis and can include things like:

  • Rent or mortgage payment
  • Car payment
  • Car insurance, life insurance and other insurance bills
  • Health insurance premiums
  • Cellphone bill
  • Child support
  • Loan payments on personal loans

Variable expenses include bills that can fluctuate regularly, such as:

  • Grocery expenses
  • Dining out
  • Utility bills
  • Miscellaneous purchases
  • Clothing costs
  • Personal care expenses
  • Healthcare expenses

You may not be able to do much about fixed expenses, but budgeting is easier if you can find ways to cut back in the variable categories. For example, could you dine out less or cancel a subscription? Little things add up.

Budget types

Getting started with budgeting basics may be easier said than done. The fact is, there are a huge number of budgeting options, from the 50/30/20 budget rule to the envelope budgeting method.

One budget strategy that works well when you’re on a limited income is called zero-sum budgeting. Here’s how zero-sum budgeting works:

  • Using paper or a spreadsheet, note your expected monthly income for the next month in one column and estimate your fixed and variable expenses in the other.
  • Next, allocate your expected income for the month in the best way you can by designating money for things like rent, bills and other costs.
  • Allocate every dollar. If you have extra income, put it toward savings or debt repayment.
  • Track your spending throughout the month to make sure you stay the course.

The main goal with zero-sum budgeting is putting each dollar of income to use.

Graduate school budget template

Most grad students don’t need anything fancy when it comes to a budget template. You can follow the Federal Student Aid office’s examples and create your own using any free spreadsheet tool.

If you’re a Microsoft Office user, you can search for a variety of free templates, including for a college budget or a personal budget. With their personal budget template, for example, you can input and track your bills, expenses and savings at any time. From there, you can use the tool to create charts and graphs, giving you a bird’s-eye view of your financial situation.

Free budgeting tools

If you like the idea of tracking your purchases and spending automatically, you can try a budgeting app. For example, the free Mint budgeting app is an expense tracking tool that will automatically track and report on every purchase you make while helping you manage bills and regular expenses. The free tool will even categorize your purchases so that you know how much you’re spending in discretionary categories like dining out, groceries and entertainment.

There are other helpful budgeting apps to consider as well, including options like PocketGuard, EveryDollar and Goodbudget.

Managing debt

When you’re a graduate student, it’s important to manage any debt you already have while minimizing any new debt you take on. The way you manage your overall debt should depend on the specific type of debts you have and their respective interest rates.

Credit card debt

Because the average credit card interest rate is currently over 17 percent, you should strive to pay down this type of debt if you have it. Consider making extra payments toward the principal each month until your debt is gone, and stop using credit cards for purchases if you can help it.

You can also consider consolidating credit card debt with a balance transfer credit card. This type of card typically has a 0 percent intro APR for 15 to 21 months, depending on the terms of the specific card. That means interest won’t continue to build up during the initial period.

If you make this move, you’ll owe a balance transfer fee, which is typically 3 percent of the amount of debt you transfer, but the overall savings may be worth it. Paying down debt at 0 percent APR can help you save money on interest, pay off debt faster or both. A balance transfer calculator can help you estimate the savings.

Keep in mind, the 0 percent APR offer won’t last forever. You’ll need a plan to lower your debt, or ideally become free of credit card debt, before your interest rate resets to the regular variable rate.

Student loan debt

Nearly all student loans for graduate students charge interest while you’re still in school, so you should strive to make payments during your program if you can.

Making payments can help you keep your student loan debt from ballooning, even if you make interest-only payments while you’re in school. If you can make more than the interest payment on your student loans, that’s even better.

If you have to make payments on undergraduate school loans while you’re in grad school, you should also make sure you’re on the right payment plan for your needs. Beyond the traditional 10-year repayment plan for federal student loans, you can also consider extended repayment or income-driven repayment plans.

Other ways for graduate students to save money

While using a budget during graduate school is smart, finding ways to earn more income and spend less can help you even more. Consider these tips to stay on budget when your income is limited during graduate school.

  • Fill out the FAFSA. Filing the Free Application for Federal Student Aid (FAFSA) helps you determine if you’re eligible for federal student aid, including federal student loans for graduate students, work-study programs, grants and more. You should fill out the FAFSA for each year you attend school, even if you think you’re ineligible for student aid.
  • Ensure you’ve applied for all scholarships and grants. The list of scholarships, grants and fellowships that can help you pay for graduate school is significant. Individual schools may offer grants on top of any funding you’ve received as part of your graduate program. Private organizations may also offer grants. Set aside time to research your eligibility and talk to your school’s financial aid office to ensure you’re not missing out on funding sources.
  • Work during school if you can. Consider federal work-study programs or work opportunities offered through your college or graduate program. Teaching assistant roles, tutoring and other part-time jobs may be available.
  • Earn rewards on your spending. Consider using a cash back credit card or rewards credit card that will let you get something back on your spending. However, only do so if you are disciplined enough to pay your credit card bill in full each month. If you haven’t built up your credit much yet, you can also consider student credit cards.
  • Ask your employer about tuition reimbursement. If you work full-time, check if your employer offers a tuition reimbursement program. Employers can offer up to $5,250 in tax-free tuition reimbursement per worker through 2025, according to the Internal Revenue Service. This benefit will not be included in your wages or reported as taxable income on your end, and it’s a tax-advantaged benefit for your employer, too.
  • Keep student loan borrowing at a minimum. Finally, strive to borrow as little as you can for your graduate degree program. While student loans may let you borrow extra to cover expenses, you’ll have to pay it back plus interest.

Resources for low-income graduate students

In some cases, the financial pressures of graduate school may be significant enough that it becomes challenging to cover essential life expenses. For example, in one small survey in the journal Public Health Nutrition nearly half of graduate student participants reported experiencing food insecurity.

If you’re concerned about your ability to buy food, pay for housing, or access healthcare, talk to your college’s financial aid office right away. They may be able to connect you with resources that can help. Many colleges have student food banks and some have emergency relief funds to help students experiencing a financial crisis.

For a list of other helpful resources, Student Training and Education in Public Service (STEPS) is a good place to start. It is geared towards undergraduates, but many of the resources are available to graduate students, too.

Some nonprofit organizations also provide help to students who are having difficulty meeting their basic needs. For example, the organization Swipe Out Hunger partners with colleges to support students who can’t afford to pay for meals.

The bottom line

Try not to be hard on yourself if you can’t follow every aspect of this budgeting advice. At the end of the day, taking some steps to minimize borrowing and save more money will always leave you better off, so aim to do what you can. Remember that you’ll probably need to adjust your budget as time goes on, and that various life circumstances will probably throw you off track from time to time.

That said, budgeting is a smart move during graduate school and for the rest of your life. Not only can budgeting help you track where the money you work hard to earn actually goes, but it can help you reach the life goals you have always dreamed about.