Parenting My Teen

With the new school year right around the corner for most of the US, it’s time to start thinking “back to school” and therefore “college”.  We dream of our kids going to college. They continue their education to get better jobs and more opportunities in life than we had. But, that dream has a price tag attached and the sooner we prepare for it, the better.

According to Collegeboard.com, the cost of yearly tuition and fees at some colleges can top the $30,000 mark. This doesn’t include the cost of room and board or books. For the average family, that number might as well be a million dollars. But, there are ways to whittle that cost down to a manageable financial obligation.

The quest to flesh out a college budget begins in ninth grade. One criterion that is used for scholarships is the student’s grade point average (GPA). Overall GPA is determined by the student’s grades throughout their four years of high school. No class can be discounted and students have to make smart choices as well as work hard.

Keeping the idea of college in their minds will drive their activities. For student athletes, this means playing well on the field in hopes of gaining an athletic scholarship to college. Athletic scholarships can cover all costs, tuition, or room and board.

Standardized tests are also a part of the college equation. Performing well on the PSAT and the SAT enhances financial aid offered by the colleges of your choice. Colleges can offer full or partial scholarships for tuition or room and board based on academic performance.

Planning for the cost

If your kids are young, begin saving for their college education now. Each state has created their own 529 educational plans to aid parents in saving money for their child’s future educational needs. A 529 plan is a tax deferred vehicle for making contributions towards education. It is never too late to open a 529 plan. Any money saved helps with college costs.

The money is invested in a variety of stocks, bonds, and mutual funds. Over the years, the contributions along with any money they have made will result in a sizable amount of money for college. Contributions extend to graduate school education as well. Best of all, any money that is not used for one child can be rolled over into a plan for the next child attending college.

Savings accounts and money market accounts can be used to put away money for college. Encourage a working child to put forty to fifty percent of their paycheck each week into a savings account. Any money they save will go towards personal needs at college. For the parents, these savings help lower the family contribution towards a child’s educational obligation.

On a yearly basis, evaluate all college savings methods. Shift money around to reap the greatest dividends from your investments. Compare the yearly yield to the average college cost to see where you stand in meeting or exceeding that amount.

Other budgeting options for college

Savings programs are but one option for financing a college education. Consider scholarships, grants, federal financial aid, state financial aid, and loans as budgeting options. Leave no stone unturned.

There are free scholarship services available on the Internet. Just sign up and search for scholarships according to your criteria. Any scholarship service that charges you money is a scam. There is no need to pay for this information.

Encourage your child to apply for all scholarships that even remotely match their qualifications and interests. Their chances of getting scholarship money increases with each application they fill out.

Federal financial aid, including grants, is awarded based on how the student and parent fill out the federal financial aid form (FAFSA). It is free to fill out each year of college and is the basis for institutional financial aid awards as well. Based on the results, students can map out ways to meet the entire cost of their college education. Many states have separate financial aid forms so check to see if your state is one of them.

CONCLUSION

Budgeting is not hard but it is tedious. The best news is that once one budget has been hammered out, future budgets will have a template to work from. School costs at all levels can sink our financial boat in a heartbeat if we fail to plan for them in advance.

Get started today with budgeting worksheets. Play around with them to see what sort of money you are spending for school expenses. Don’t let the shock immobilize you. Use it to motivate you to set a budget for the next school year and save money.