It likely feels as if, just yesterday, your child was a toddler. And, somehow, that toddler will now be starting their first semester of college in the fall. It’s also likely that you felt like you had all the time in the world to prepare, and now that the moment is fast approaching, you feel unsure of your next move—or even panicked about what this looks like for you financially. To guide you along the way, we’ve listed a few things to consider as you prepare for your college student’s first year.
1. Consider How Financially Involved You Will Be
Before you begin planning, you must have an understanding of how much (or how little) you will be involved financially with your child’s college expenses. This way, you have a foundation to start from, and you can bring a solid financial plan to your child to explain their role.
Here are a few questions your family will want to discuss:
- Will my child work throughout the school year? If so, how much?
- Am I planning to pay all expenses, including living expenses?
- Do I plan on my child taking out any student loans?
- How many years does my child plan to attend school? Will I pay for each year?
By answering these questions, you can begin to build a clear picture of your expectations for yourself as your child attends school. You will then use this information to guide you through these next five items.
2. Gather a Comprehensive List of Expenses
The expense that will surprise you won’t be the annual tuition but rather the various miscellaneous needs. Take time to research exactly what your child will need and want in their college career. Once you have a comprehensive list, you can decide who is responsible for which expenses, you or your child.
Often, the university will provide a list of expected costs to help you; but to give you an idea, here are a few possible expenses to look out for:
- Technology (computer, tablet, phone, etc.)
- Books
- Dorm room essentials
- Health insurance
- Meal plans
- Parking pass
- Emergency fund
- Fraternity or sorority dues
- Study abroad
3. Talk Through Expectations with Your Child
As you discover what the total cost of your child’s college will be, including miscellaneous expenses, it’s essential to communicate your expectations clearly to your child. Let them know what the costs are, what you will cover, what you expect them to pay, and the rules for any allowance funds. By talking openly to your child about the financial side of their college education, you create space for a conversation about financial responsibility, what they can expect, and how they should budget according to the plan.
4. Talk with Your Child About Budgeting
Their first year of college will be your child’s first time out on their own, budgeting to make their money last without you there to oversee their spending. Leading up to their first semester, talk often and openly about budgeting responsibly, using yourself as an example. If you feel that your child will relate better to someone more objective, consider finding a budgeting webinar or tutorial that you and your child can work through together.
5. Talk with Your Child’s School’s Financial Aid Office
To have the most comprehensive understanding possible of your child’s expenses, talk with their school’s financial aid office to review their financial aid package. Remember that if your financial situation has changed since your child applied for aid (e.g., you have a decrease in income), you can appeal for it to be reevaluated based on your new circumstances.
6. Review Your Insurance Coverage
Consider sitting down with your insurance agent to discuss your child going to college and how that may change your coverage needs. You may find that you should make changes to their auto insurance or even that you should add renter’s insurance for their college housing. Make sure that you calculate an approximate value of what your student will have with them (especially their devices).
Need Help Planning for Your Child’s College?
You don’t have to navigate your child’s college finances alone. With a financial advisor on your side, you can make the choices that are best for your family’s long-term plan. Ready to build a plan that works for you? Contact Southwestern Investment Group today to schedule a consultation!
