The majority of Americans that have reached the young adult age go to college. This is a nearly inevitable part of life and one you should have been saving for. There are many things to prepare for once your child starts college. One of the most fundamental things you must do is create a budget for them, one that they feel comfortable with.

Create a Budget For Them

Having a budget can determine your child’s life in college. Remember, this is a very different lifestyle from what they have experienced, and regardless of what they tell you, they can’t be ready for it. However, their given budget can give them the pace they need to live in college, and it can give you the breathing space you need when it comes to your financials.

Determining a budget for college can be pretty complicated because it’s an entirely different beast from all the budgets you’ve made before. For first-time parents, it’s all about trial and error. Therefore, we suggest that you keep an eye out for your child’s spending from day one.

They might hate you for it, but once you get a budget in order, they can eventually live a much easier life from then. So explain to them that you need to do it not because you want to bar them from college life, but instead you want to find the appropriate budget for their kind of lifestyle.

If you need an average to guide you, you need to know that the average cost of living for college students is around $14,000. Now, that’s a lot of money, and there’s a good chance that it can surpass your half-year budget for your family alone, but know that there is a good reason for this. The main reason the cost of living is so high for college students is their lodging.

It’s estimated that college students spend about $10,000 on their lodging alone. This depends primarily on the kind of place they choose to stay. However, the further the site is, the higher their transportation costs. So if you want to reduce your child’s financial obligations, it might be better for them to attend college near your place.

Utilize Student Loans

Your child can’t go to college if you can’t pay the tuition fee, and the tuition fee will be a significant part of your child’s college expenses. The average tuition fee for public, in-state colleges is around $10,000, making them the cheapest choice when it comes to colleges. The next bracket is public, out-of-state colleges which average $22,000. The most expensive are private colleges and universities, priced at a hefty $38,000, about half the salary of an American household.

Regardless of the cost, you’ll still need student loans to get your child through college. If you look at the college timeline, a four-year bachelor’s degree in a public, in-state college will still cost you $40,000 on average, and not many people can afford that much money for tertiary education alone. You still have annual family expenses to think about.

You should only get what you need. The main reason behind this is that student loans have a high-interest rate, about 5% on average. So make sure you don’t get too much, so you don’t accumulate costs.

Utilize Other Loans!

It’s better to use student loans as your last resort if you can borrow other low-interest loans. One loan many people can utilize but tend to forget is their home loan. Mortgages can be refinanced, and the refinance value that most lenders or mortgage companies usually offer is around 2%, making them one of the loans with the lowest interest rates. The best part is that you can use these loans for all sorts of other things, such as a business and your child’s college tuition fee. Because of its low-interest rates, we suggest that you get this first before any other loans in the market right now.

Healthy Living Must Be a Priority

Your child must be briefed about healthy living before they live your home once you’ve settled their expenses and tuition fee. Sure, living on ramen noodles alone might help them save money, but remind them of the implications of such a lifestyle. Help them visit a healthy living seminar before they leave for college so that they’ll know that there are cheaper and healthier options out there for them when it comes to food.

If you’re unsure whether this will stick in their minds, then it might be best for you to get health insurance for them. This will ensure that you’re prepared for any medical emergencies that might happen from the lifestyle they choose to live.

So here are various ways you can prepare yourself when your child is entering the tertiary education level. Don’t be worried too much. Once you implement these options into your life, your child’s expenses can be easily handled.

Published: 2022-03-08 15:07:21