Get a Start on College Budget Worksheets
Don't Rely on Student Loans to Pay for College
Congratulations are definitely in order if you are a family that has successfully negotiated the college application and financial aid process. It is a difficult road to travel, and nobody would really blame you if you felt like taking a few months off to rest. After all, it feels the final decision day in May is a long way off, and the actual college attendance is even further in the future, so why worry?
Although it might be nice to let up on the accelerator pedal just a little, the truth is that there are several steps you can take now that could make a big difference to your financial future.
One crucial step, of course, is to continue the search for college scholarships. These are available year-round and some can really put a nice dent in the amount of money you will have to pay for college. Another step is to check your student loan options. Try to borrow as little as possible, but if you do need to borrow be smart about it. Which brings us to the final task — create a college budget worksheet.
This may feel like a dreary way of spending your spring months, but the time invested could pay off in many unexpected ways. You may be surprised to see how much it costs to have a child in college when you sit down and actually crunch some numbers. Your child has been living at home for about 18 years, and most of those costs have just been absorbed into the family budget.
In addition, it might be the first time your child has independent control over money, so you want to make sure proper restrictions are in place. When you separate your children’s out-of-pocket expenses from the family, it might uncover some lapses in cash flow availability. Budgeting early can still leave time to research ways to cut expenses or to earn additional money over the summer to cover the shortfall.
The College Board conducts a yearly survey which reveals the estimated budget requirements at various types of educational institutions. This is a good place to start for a general idea of costs, and then you can work out a specific budget for your individual circumstances. The goal is to use your own money, and borrow as little as possible. Here are some tips for getting started on creating a college budget worksheet:
- Find a template: There are many quality free budgeting templates online that can help you with the college budgeting process. Find one that is compatible with your student’s specific situation, and made adaptations as necessary.
- Start out slowly: It might be a good idea to start with a budget for just a month or two to make sure you understand the concept completely, and haven’t omitted any items. Carefully keep track of income and expenses so you can make adjustments as you expand to a longer budget for a semester or the entire school year.
- Review each item individually: You want to make sure that the numbers you use are realistic, but you also want to see if there are any cuts that can be made. Look at cost options between new and used textbooks, check out data plans, and look for travel budget savers such as sharing rides with other students.
- Don’t forget the unexpected: Allow a little bit of room in each month’s budget to put aside some money for emergency purposes. You never know when the car will need a repair, a medical emergency might arise, or something else might happen. If you have the money to cover it you will be glad you planned for this possibility.
Finally, it is crucial to involve your student in the planning process. This is a great exercise in learning about handling money, and lets your child know what the expectations are right from the start. Make it known that you will not serve as the Bank of Mom and Dad while your child enjoys a carefree campus life. You are all in this together, and need to plan accordingly.