College Savings Guide for Parents and Students

With the cost of higher education growing every year, it’s never too early to begin brainstorming ways to reduce college expenses.

Both parents and children should take the initiative to save for college or trade school, and there are plenty of ways to get started. While it’s never too late to start, the earlier you begin the better. As a parent, you can start saving for your child’s education before they’re even born. Additionally, there are several existing resources designed to help teenagers and college students avoid accumulating large amounts of debt. Read on to learn how parents and students can work together to lessen the cost of higher education.

Saving Tips for Parents

One of the most common ways parents save for a child’s education is by opening a college fund, such as a 529 plan or a Roth IRA. These are both tax-advantaged savings plans you can use to put money away for future college expenses, such as tuition, room and board, and books.

Ideally, this savings would start as early as possible. Some people choose to start saving when they learn they’re expecting. However, it’s important to consider making sure your own bases are covered first. This means paying off any student loans or high-interest revolving debt, and even growing retirement and emergency savings, before building up a college education savings fund.

Saving Tips for Students

Students have many opportunities to make college more affordable, and some of them don’t have anything to do with money. While attending high school, make sure to:

• Take classes that will count as college credit. This means you’ll have to take (and pay for) fewer college courses when you get there.
• Study hard and get good grades. This will increase your eligibility for more scholarships. Additionally, start applying for scholarships early instead of waiting until second semester senior year.
• Start preparing for the ACT or SAT early. Your score often determines eligibility for scholarships.

If it won’t interfere with academics, consider getting a part-time job during the school year and/or a full-time job in the summer. Students likely won’t have many expenses while in high school, so make sure to save most of these earnings.

One way to make saving money easier is by setting up an account that will automatically transfer an amount of money from your checking account to your savings account on a specific day of the month. This way, the saving will be automatic and you won’t be as tempted to spend it.

Tips for Current College Students

One of the most important things a student can do is apply for Federal Student Aid and scholarships every year. Don’t forget to fill out the FAFSA, and make sure to apply for every scholarship you can.

Housing is the second-highest college expense after tuition. Consider living off-campus after you’re a year or two in, or apply to become a Resident Assistant (RA). In return for overseeing dorm life, RAs often receive free housing, a meal plan and a financial stipend.

Once you feel comfortable with your classes and college life, consider getting a part-time job. On-campus jobs are typically flexible with class schedules. If you’re not taking summer classes, working full-time while you’re on break can help save up extra cash. You may also consider applying for a paid internship, as it can help secure a job after graduation.

Being in college can be tough on finances. This is because there are large expenses but little to no income. That makes it incredibly important to differentiate between things you need and things you want.

Set budgets and stick to them. Track your purchases by reviewing your statements or logging into your mobile banking app regularly. Insight into how much you have saved and what you’re spending your money on is available right at your fingertips, so be sure to use it to your advantage.

Every Dollar Counts

Take advantage of the resources around you to help with college or trade school expenses. With every healthy saving habit you adopt, you lessen the likelihood of graduating with substantial debt. Whether you’re a parent or a teenager preparing for college costs, the best course of action you can take is to start saving early. Be sure to speak with your banker about resources to help save for this exciting chapter.