Going to college is an exciting time. Many incoming freshmen are so eager to move to their new dorms, start classes, and party that they neglect to check their finances before the big day. If you’re moving to college soon or have a child starting college this fall, be sure to do a bit of financial housekeeping before the semester starts for an easier freshman year.
Fully Estimate Your College Expenses
College costs more than just tuition fees. Depending on your housing situation, you may need to pay for a dorm room or on-campus housing. You might find an off-campus rental available, but you’ll need to factor in transportation costs if it’s outside of walking distance. Some of the most commonly overlooked expenses for first year college students include:
- Unless your school offers a meal plan with your tuition, you’ll need to buy and prepare your own food. This not only entails groceries, but also cutlery and cookware depending on what amenities are available with your housing situation.
- While you may not need to worry about notebooks and pens much in the age of laptops and digital test-taking, you will still need basic living supplies like hygiene products, laundry detergent, and basic household items for your dorm or rental.
- If you need to use public transportation to get to class or drive, you’ll need to factor in bus tokens or gas costs into your college budget plan.
- Organizational dues. If your college student has dreams of joining a sorority or fraternity, some of these organizations require hundreds of dollars or more in dues each month or year. If you pledge to a student organization, be sure to fully understand the financial commitment and budget accordingly.
- While college students should remain focused on their studies, everyone needs time to blow off steam. If you plan to attend any concerts or other events during the school year, or if you simply want some “walking around money” to pick up takeout for cram sessions or catch the occasional movie, be sure to have money put aside in advance and never let entertainment interfere with your studies.
Developing a budget is just one way to prepare financially for college. As college is the most common time for young adults to move away from their parents and start building their adult lives, college students should embrace their new independence and start taking charge of their personal finances.
Work with Your Family and Lenders
Do you understand the difference between grants and student loans? You don’t need to repay grants as long as you maintain your eligibility under its terms. Student loan repayment typically waits until after you graduate, but you can start repaying in advance to lower the principal before interest starts to accrue.
How much are your parents planning to pay toward your education? Will you be entering any kind of work-study program or working at a part-time job while attending classes? These are important questions to answer before you start school so you can make more informed decisions about your finances. Soon-to-be college students should ask their parents to help clarify tax-related issues, student loan repayment, and a solid plan for establishing personal finances. Families will need to work together to develop solid budgets for college students.
College is perfect time for young adults to take charge over their personal finances and start building their adult lives. Consider these tips and start building a budget for your first year of college or your child’s, and you can avoid some of the most common freshman financial pitfalls.
Additional Resources:
https://money.usnews.com/money/blogs/my-money/articles/get-your-finances-ready-for-college
https://www.studentdebtrelief.us/college-tips/college-student-guide-to-finances-and-budgeting/
https://www.consumerreports.org/budgeting/money-101-for-college-students-how-to-budget/
https://www.discover.com/student-loans/college-planning/for-parents/financing-college/teach-about-finances
