Save Money Sending Your Child to College
by Amy L. Thomas
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My son has almost completed his first year of college, and I believe I have learned just as much as he has. Although he is only two hours away, he is living on his own for the first time with a car, a dorm room and a meal plan. We have made some mistakes, ones that we are hoping to correct next year. Below are some ways that students and families can save big on college expenses.
- If you and/or your student are taking out student loans, opt to begin making monthly payments as soon as possible. Many loan companies will allow you to delay paying until your time in school has ended, or even begin six months after graduation. This only delays and adds to the interest that will accumulate. If possible, begin paying immediately, even adding a bit more each month to pay down the principal. This can significantly lower the balance that is owed and help a student begin their post-college years with a lower financial obligation.
- Most colleges that have on-campus dining facilities will have a variety of options for the student. With the sleeping patterns of most college students, you may be able to save money by choosing fewer meals for the weekends, or even during the week. Check the times of your classes each semester, and begin to realize if you will be able to make it to a cafeteria for each meal. My son found that he would rather eat a breakfast bar or have a bowl of cereal in his dorm room and sleep later during the week before classes than get into a long breakfast line in the cafeteria.
- There is a tendency to "load up" on items that you believe will be essential for a student to have in their room before they leave for school. This can lead to a lot of overspending on articles that are not necessary, never get used, or worse of all, get thrown out. Being prepared is a good thing, but until your student has experienced their new living arrangement, it is hard to know what is actually needed. I made the mistake of loading my son up with what I believed he needed, going above and beyond the "college list" of items that were provided by the school. The best idea is to supply your student with personal hygiene products that they already use, and then wait to see what is actually necessary for dorm life.
- This is the big one, the one about your student spending at college. My son had a job and saved money in his bank account. He did very well with this concept. He then turned 18 and got his own checking account with an ATM card. I taught him about using an ATM, stating that it was like a check, not a credit card, and he could only spend up to what he had in his account. I also showed him how to set up his account online so he could check it weekly, or he could open the statements he received in the mail every month. He seemed to understand, and after a few months, he went away to school. When he was home on his holiday break, he received something in the mail from his bank. He ignored it, but I knew that it might show that there was a problem with his account. A few hours later, my son called me and said his ATM card would not work. He asked me to go home and open up the bank statement. Sure enough, he was overdrawn! He was in total shock; he could not believe he had already spent all of his money. He never had looked at his statements for months and had not gone online to see where he stood. We went over his statements carefully and found that late night trips to the pizza parlor, gas, and music were the culprits. I had to let him "borrow" money from me to cover his overdrawn account and the associated fees. He will be paying me back this summer when he returns to his job. He learned a big lesson, and so did I. He was using his ATM card with the "credit" option that many stores have, and thus it was a week before the bank caught up and began charging him fees for an overdrawn account.
If your college student has an ATM card associated with a checking account, tell them to use it as an ATM only or, better yet, just deal in cash. It is good for an emergency, but really there is no need for it on a daily basis. Have them check their account online a few times a week to ensure that all of the information is accurate and to check how much is actually in their account at any given point in time.
The college years can be the most exciting for a student, and the most financially trying for a family. Using a few practical saving strategies can help get everyone on the same page. If financial situations are approached with honest, open communication, most mistakes can be averted.
Take the Next Step:
- To see how your college checklist compares, see the Off-to-College Checklist provided courtesy of CollegeBoard.com.
- For more information on saving for college, please click here
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