Cost of living is the amount of money to purchase goods and services to sustain a certain level of living. In perspective of education, students’ costs of living are spending on study fees, food, books and others. Previous studies have shown that students do not have enough money to buy food and face hunger which can jeopardise their health and education. This has led to the existence of free food scheme in many universities including Universiti Utara Malaysia (UUM). Is the free food scheme beneficial or detrimental to the students? Thus, the aim of this study is to investigate the effect of free food scheme on UUM students’ financial management. Observational study was conducted to obtain actual food prices at selected cafeterias in UUM. Survey was implemented by distributing questionnaire randomly in understanding the students spending behaviour and opinion on free food scheme. Exploratory data analysis and inferential statistics techniques were used to analyse the data. The findings discovered the cost of food in UUM is affordable thus students have no problem to buy food with their study loan or scholarship if they manage their money well. The findings also reveal that 25% of UUM students are taking free food. However, half of them with poor family background struggling financially due to saving money either to help family or for future internship usage. While the other half spend their money less on food but more on clothing, post-paid/pre-paid (top up), smartphone and entertainment. Thus, the existence of free food scheme has good effect on underprivileged students but has adverse effect on nurturing future bad financial manager. Hence the free food scheme should be revised by focussing on strategical and systematic process of implementation.

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