We all know how expensive college tuition is, but it’s an expense you have to pay—and can’t change. Here’s a list of more flexible expenses to review as you outline financial costs and make a budget.

Including your teen in this process can help him gain a greater understanding (and appreciation) for what a financial undertaking college can be. It can also help you identify ways to reduce the total cost of college.

• Living arrangements. Will your teen be living in a dorm, in an apartment or at home?
  • Factor in all the associated costs when choosing between a dorm or apartment. A dorm includes utilities, while an apartment usually does not. This can make a significant difference in total cost.
  • Does your family live within commuting distance of the institution? If so, having your child live at home while attending college can be a good way to significantly cut costs. You could even make a deal with your teen whereby he or she lives at home for the first year or two. Then, with good grades, your teen can “earn” additional financial support from you to help pay for on-campus living for the remainder of school.
• Books. College-level textbooks can be incredibly expensive. Encourage your student to buy used books when possible, and to take good care of them so she can sell them back at the end of each semester.
• Food. If your teen lives on campus, can she take advantage of a meal plan?
• Insurance. Be sure to find out whether your child is still covered under your health, auto and other insurance plans. If not, check to see if the college offers plans at affordable prices.
• Transportation. Does your teen need a car at college? Is public transportation a better choice? Are there monthly discounted passes available for public transit?

• Travel. If college is far from home, you’ll need to decide ahead of time how many trips home each year your teen can make. Who will pay for this? Keep in mind that 529 plans do not consider transportation a qualified expense.
• Personal care. Your teen’s expenditures on high-end products and salons, manicures and the like may need to be abandoned in college. Instead, encourage your teen to shop around for services that fit within her budget.
• Discretionary spending. Set the expectation that life away from home may not be as comfortable as life at home. For example, money may need to go toward a computer and Internet service rather than TV and cable. Entertainment expenses may need to be curtailed for a while. Be sure to discuss with your teen the problems with credit card debt, to which college kids are very susceptible during this time of new independence. Keep in mind that most credit card debt is the result of nickel-and-dime spending—not major purchases.

Remember: a budget is a living document. You and your teen will probably need to revisit yours after school has been in session for a few months.

 

The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The type of savings and investment strategies mentioned may not be suitable for everyone. Each investor needs to review a security transaction or strategy for his or her own particular situation. The examples mentioned are for informational purposes only and are not intended to represent results you should expect in the future. Data contained here is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.