Among the common communication devices mobile phones are quite popular in the university students. However, Parents, guardians, and teachers are worried that students are spending too much money and time on using mobile phone and have not enough time to study and participate in social activities. This study attempts to analyze the effect of mobile phone use on the students’ budget, social behavior and academic performance by taking Bacha Khan University, Charsadda, Pakistan as a case study. The study also evaluates the mobile phone addiction behavior of the students. Varimax rotation matrix is applied using data collected from 365 students through questionnaire. Results show that a female student, an engaged or divorced student, the student enrolled in Master program, and the student whose father is semi-government employee spent half of their part-time job income or pocket money on mobile phone. Besides, the students give less time to calling and sending less texts to family and friends while they give more time to calling and sending more texts to partner and other peoples. Results of the Varimax rotation matrix reveal that the students always use mobile phone for entertainment and they are often use mobile phone for making calls, sending text massages, getting news, and for connecting to social media. Furthermore, the use of mobile phone reduced the students’ communication and travel costs as well as the use of mobile phone internet reduced their book purchasing costs. Finally, the use of mobile phone has both negative and positive impacts on the students’ social behavior and on their academic performance. However, the negative impacts of using mobile phone on the students’ academic performance and on their social behavior outweighs its positive impacts.