If you’re mentally preparing yourself to send one of your kids off to college, make sure you’re also financially preparing yourself. Here are some tips to help you create a college budget.
Gather Expenses. Prepare for the college year by estimating expenses like tuition, textbooks, room and board, transportation and discretionary spending.
Streamline Your Spending. Once you have an idea on expenses, go through your budget and highlight areas of spending that can be reduced. Two easy places to cut back is dining out and entertainment. Funnel that extra cash into your college savings account.
Talk It Out. Talk to your kid about their budget and spending habits. Get into as much detail as possible about what they’re expected to pay for, how much they should save and more.
Additionally, you should stress to your kid the importance of graduating in four years. Every extra year of college is more money added to the bill. As US News reports, if they’re unsure of a major, discuss classes that will transfer easily from major to major.
Don’t Overcommit. You should be saving for college, but not at the sake of your retirement. Make sure your kid has applied for grants and scholarships to help alleviate the financial burden.
Consider a Credit Card. It might be a good idea to get your teenager a credit card. Doing so will help them build credit and allow you an excellent teaching opportunity. You can guide them through the usage as they build credit as an authorized user on one of your accounts. You can also co-sign with them for their own card. Just be sure to regularly monitor the card and set limits on spending.