Socialist ideas build by K.Marx have some idealistic elements: everyone shell be motivated by their high morals (that what needed students in the example described). Of course, that will not work. As everything developing, socialist model of K.Marx needs improvements. However, (taking Europe as example) I think it would be great to have free or really low cost housing, utilities, schools and medicine. And that is only can be achieved on the government level. And that is a socialist approach.
I do not mean to eliminate private businesses or having own house. I also do not mean any limitation on the income. However, there was a good capitalist practice of doing charity. Money spend on charity are tax deductible. Another good way of spending money is to improve your own educational level. One more - improve your house (which leads to hiring contractors, etc, so less % of unemployment), or start your own business. Keeping money under the pillow is not a capitalist way.