When you’re preparing your college-bound child, you tend to worry about grades, test scores and admission essays. Once they’ve decided on where they’ll take classes, your attention shifts to tuition payments, schedules and how well your child will get along with their roommates. There’s a lot of preparation – mentally, emotionally and financially – as your student begins his or her newest adventure.
Don’t forget to focus on your obligations as well. Proactive consideration of your established budget is smart planning for you and your student. Financial stability is one of the leading factors of happiness in adulthood, so teaching your child to budget in their college years is a life lesson with serious real-world impact.
- Helping Your College Student Live Within Their Means
- Money Smart Tips for College Students
- Saving Money on College Textbooks
- Where To Find College Scholarships
BUDGETING FOR COLLEGE
Look At Your Accounts
Take an honest look at what you can afford to pay for and how much monetary help you can provide. If you have other children in the house, or if you foresee the need to assist your parents as they age, you should strongly consider and account for these future expenses.
How does your retirement look? Saving for yourself should take precedence overpaying for your child’s college costs. Always. Students will have a much easier time getting financial assistance for tuition and living costs than you will if you find yourself short on funds at retirement.
Be Transparent about Support
Once you’ve decided what you want to do financially for your student, tell them! Too often, parents don’t communicate with their children about finances. While this is often not intentional, it can be harmful to their ability to maintain their finances.
What and how much you’ll be supporting them as they begin their college careers is an excellent opportunity to start this conversation.
If you’re willing and able to assist your student financially, it’s critical to have a discussion with your child about how, when and what you’re offering to cover. Too often, parents send money or set up a stipend hoping their child will be naturally prone to manage their expenses.
Caught up in the novelty of their newfound independence, a student might try to justify purchasing an $80 team jersey instead of allotting their funds for unforeseen expenses like gas money or fees for extracurricular clubs or groups.
Clarify what you will pay for long before school begins. This way, your student can start making their own, independent choices about saving or spending their money. The summer before freshman year is a great time to begin putting together a budget. Establish a budget with your student and remember they’ve likely never done this before.
CommunityAmerica offers a budgeting program called Finance Works, but there are other programs out there like You Need A Budget or Mint that make creating a budget simple. These digital programs also allow you to monitor your funds, and your student’s, easily.
There are many savings programs, such as a 529 savings plan, where you can start the college savings process earlier. However, even if you can’t start one of these programs, it is essential to start building savings for your kids as soon as possible. Even $10 a week is better than nothing at all.
Look Beyond the Obvious
Many parents automatically look at tuition payments as the best way to support, but if the student can get solid financial assistance on tuition, consider other ways to help. Bill or insurance support, covering grocery costs or other living expenses are areas to consider.
If you’re unable to help out with college costs, there are still things you can do to promote financial success for your student. Make time to help them fill out FAFSA paperwork, scholarship applications or other student aid forms. If your child is working part-time as they finish high school, you may consider ‘matching’ their paychecks or tips. It’s a gesture that can encourage them to work harder while promoting financial diligence.
The #1 mistake parents make is telling their child they must go to college. Not every student is cut out for college. Some of them may do much better by attending trade schools. Just because your student does not attend a four-year university, it does not mean he or she will not be successful. Encourage your child to find their passion and if that means an education other than traditional college, then encourage him or her to pursue it.