The already high cost of college is predicted to rise, which means it’s more important than ever to start saving early and think of strategies that will help make college more affordable.
Both parents and children play a role in saving for college, and while it’s best to start saving as early as possible, it’s never too late to start. Whether you’re a parent saving for your child’s education, a teenager preparing to go to college in a few years, or a college student trying to get by without accumulating a substantial amount of debt, I have a few tips for you.
Tips for Parents Saving for Their Child’s College Fund
One of the most common ways parents save for their children’s education is by opening a college fund, such as a 529 plan or a Roth IRA. These are both tax-advantaged savings plans that 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 your own student loans and high-interest revolving debt, and even growing your retirement and emergency savings, before you start saving for your child’s future college education. Just remember, you’ll be in a better position to help your child later if you work on becoming debt free now.
Tips for Teenagers Preparing for College
There are many things teenagers can do to make college more affordable, and some of them don’t have anything to do with money. While attending high school, make sure you:
- Take AP 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. It will qualify you for more scholarships later. You should also start applying for scholarships early. Don’t wait until the second semester of senior year!
- Start preparing for the ACT or SAT early. Your score may determine how many scholarships you qualify for.
If it won’t interfere with your academics, consider getting a part-time job during the school year and/or a full-time job in the summer. You likely won’t have many expenses living at home, so make sure you save almost all your earnings. Your future self will thank you!
One way to make saving your money easier is setting up an account that will automatically transfer an amount of money from your checking to your savings on a specific day of the month. This way, it will be out of sight and out of mind. You won’t be as tempted to spend it.
Tips for Current College Students
One of the most important things you can do as a student to make college more affordable is to apply for Federal Student Aid and scholarships every year. Don’t forget to fill out your FAFSA, and make sure to apply for every scholarship you meet the minimum qualifications for.
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 and time you need off to study. If you’re not taking summer classes, going full-time while you’re on break can help save up extra cash. You may also consider doing a paid internship, as it can help you secure a job after you graduate.
Being in college can be tough on your finances. This is because you have huge expenses but little to no income. That makes it incredibly important to differentiate between things you need and things you want to spend money on.
Set budgets and stick to them. Track your purchases by reviewing your statements or logging into your mobile banking app. 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!
Whether you’re a new parent trying to pay off debt and save for retirement, a teenager working on the weekends, or a college student trying to get by, remember that every dollar you save will make a difference in graduating without substantial debt. There are many resources available to help you save, so be sure to speak to your banker to learn about your options.