College Freshman Parent Survival Tips

They have made it!  Your student(s) has successfully completed the high school years and are looking forward to their first year of college life.  They are so excited, but you may be more nervous than excited.  You may be a but anxious about your “baby” heading off to the fresh air of the college campus.  Even if they are staying locally, college life is a whole new world.  And you, as the parent, have a whole new role.  So here are some parent survival tips for those with college freshman

Parent Tip #1: Remember you are not forgotten.

The number one concern parents have about their child entering college life is losing touch with their student.  And it makes sense that this is a concern.  For the past 18-19 years, the parent has been right there for every major event in the life of their student.  But now, there is a strange separation.  You should celebrate your child maturing into an adult.  But sometimes this separation causes a great deal of anxiety.  So remember, you are not forgotten, but you should take deliberate steps to stay connected.  That brings us to the second of our Parent Survival Tips.

Parent Tip #2: Remember to stay Connected

The number one way you stay connected with your student while they are in college is to communicate with them.  This may be a bit tricky because college schedules can get crazy.  However, you can find time.  Many families choose to have a specific time that they connect with their child.  You can schedule time on the calendar before it gets taken by classes, study, work or party time.

Also, you need to know that once your child enters college, their privacy is protected by the Family Educational Rights and Privacy Act (FERPA).  You should familiarize yourself with the the particulars of this law.  FERPA was designed to protect the private information of the college student.  You as the parent(s)/guardian(s) have to ask for permission to view this information.  Here is how the law reads, “schools must have written permission from the parent or eligible student in order to release any information from a student’s education record.”  So make sure you and your student sign the pertinent documentation if you would like access to this school information.

Parent Tip #3: Remember to evaluate the plan

The third of our Parent Survival Tips is to evaluate the plan.  As you connect with your student, make sure you evaluate your college financial plan.  If you are wise, you and your student has developed a college financial plan.  You will need to include all the income and spending plans for the semester/year.  Then evaluate this plan on a monthly basis.  It does not need to be a thorough evaluation, but rather a check-up.  For many students this is the first time they will need to be concerned with a budget.  Financial planning is an important lesson your child will learn during their college life.

We are sure there are many other parent survival tips that you will learn over the coming months.  Be sure to comment below to share some of your favorite parent survival tips.

Creating a College Budget

The most beneficial assignment in preparing for your college financial needs is creating a college budget.  In fact, it’s probably one of the most powerful tools in the entire financial planning industry.  But for college students it is particularly significant.  By creating a college budget you will experience a greater freedom in your finances than many of your peers.  Here are some of the basics you need to know for creating your college budget.

Creating a College Budget: Why?

Creating a college budget gives great financial freedom.  When many people hear the term budget, they automatically think of restraint.  They automatically think of what they can not do.  But a budget is the exact opposite.  A budget is a financial plan that is designed to guide your spending and saving to reach your designated goal.  The goal of your budget may change over time, as will your budget, but the usefulness of a budget will remain.  Once you have created your budget, you will experience greater freedom in your spending routines, because you will know that your spending is in line with your financial goals.

Creating a College Budget: How?

So, let’s get down to the basics of starting a budget.  There are three steps needed to develop your college budget.

Track your Income and Spending – This first step may sound simple, but after years of financial advising, we are still amazed at how many people have no idea where their money goes.  So the first step to take is to track your income and spending.  How much money do you make each and every month?  How much money do you need to pay the bills?  How much money do you spend on coffee?  You want to track every penny.  Once you have tracked your income and spending, you need to move on to the next step.

Establish your Goal – You need to determine your goal.  Here are a few good goals for college students: graduate college with no/low student debt, live off my summer income, pay for my car, etc.  This list could go on and on.  Your goal is your financial dream.  But we want to move it from a dream…to a plan…to your reality.

Plan your Budget – Now that you have tracked your income and expenses and have decided your goal, it’s time to craft your plan.  Start with income.  What is you total income?  This may not be steady income, but rather a lump sum.

Next, determine your goal.  Let’s take one college student’s goal.  They said that they wanted to live two semesters (Fall and Spring) on money they had raised over the summer.  They had raised roughly $2400.00 while working during the summer (Income).  This was important to them because they wanted to avoid consumer debt (Goal).  Here were their spending needs: Gas to commute to college ($309.00), car insurance ($783.00), coffee ($468.00), school supplies ($60.00), and allowance ($780.00).  Some of the expenses in these categories are set in stone, while others may be a bit more flexible.  This student’s plan works.  Their income and spending aligned to meet their goal.  Success!

Creating a College Budget:  Success!

Now that you have your budget, there is still some work to be done.  You need to evaluate your spending to ensure you are staying true to your plan.  Many people fall short in this area.  They forget to check in with their plan and make corrections.  What good does a budget do, if you do not compare it with your income and spending?  None!  However, if you check in with your plan and ensure you are following it, you will experience great financial freedom, and you will be establishing a discipline that will benefit you for the rest of your life!

Do you have a College Budget?  If not, why not start today to create a college budget for your college financial needs.  If you do, you are already at the head of your class.

College Financial Misconceptions

There is plenty of college financial advice available to the American family.  A quick internet search, and you can find pages of content.  But that does not mean that we are more educated about college financial planning.  As we travel our area presenting our educational college financial workshops, we find that many people are more confused than ever about college finances.  Here are some of the top college financial misconceptions that we come across.

College Financial Misconceptions: College is or will be  Free!

This was one of the rallying points of the recent election cycle.  There are a few colleges out there that offer free tuition, but for the most part college is not free, nor will it be free for the foreseeable future.  Some countries, such as Germany, have tried to make college free for all students.  But it isn’t really a free ride: it’s paid for by taxes.  I think maybe we should just remember, that there is no such thing as a free ride.  Even if it was label as “free”, there is a cost somewhere.

College Financial Misconceptions: There is plenty of time to plan!

Most people we meet have little to no plan to pay for their college needs.  In fact, the words we hear most often are, “I wish I’d heard this sooner!”  With college costs soaring, the average family can expect their college cost for a 4 year college degree to be between $80,000 – $120,000.  In a recent article (October 2016) entitled, “Here’s What the Average American is Saving for College” is was reported “According to Sallie Mae, the Average Family has socked away $16,38o….to meet their [college] goals.”  You can see that there is a great difference between what college actually costs and what the average person has saved for college.   The secret to saving more is to start a good plan early.  The longer you wait to plan, the more difficult it will be to attend your college of choice.

College Financial Misconceptions: My child will get scholarships!

Scholarship and Grants are certainly a part of most college awards letters, but the chance of obtaining a full scholarship is pretty rare.  How rare?  According to Mark Kantrowitz, editor of FinAid.org, only about .3% of full time college students received enough to cover the total cost of college.  This number again highlights the fact that you cannot rely upon scholarships to pay for your college plans.  You need to have a plan, and you need to follow that plan.

College Financial Misconceptions: The EFC is all I will have to pay!

A phrase that is common in college financial planning is the Expected Family Contribution (EFC).  The EFC is used “to determine an applicant’s eligibility for need-based federal student aid, and in many cases, state and institutional (college) aid.”*  But the term EFC is a bit misleading.  The EFC is not the maximum that you will be expected to cover, but rather the starting point of your responsibility.  For instance, let’s say your EFC is 17,000.00.  The award letter arrives and the total college cost is 32,000.00 you receive 5,500 federal help in the form of an un-subsidized loan and 3,000 in school scholarships and grants.  There is still a difference of 6,500.00 between total award and EFC.  This difference is the family’s responsibility.  You can submit an appeal letter, but ultimately the family is responsible.

Don’t let these college financial misconceptions keep you from developing a financial plan for college.  Don’t be confused by all the information you are presented regarding college finances. Develop a plan today and start to follow that plan toward your college dreams.  If needed, obtain help from a financial planner who specializes in planning for the college years.

 

 

 

College Strategies for the High School Freshman

Your student has now reached the halfway mark through his/her first year of high school!  At this point, much of the nuts-and-bolts of specific college planning and financial strategies are still processing. However, you are currently in the ideal time to assess where things stand with your freshman student and his/her overall high school experience.  So here are some college strategies for the high school freshman

College Strategies for the High School Freshman: Pay Attention to the Fall Semester

The first report card of high school is a pretty big deal, and it is the initial indicator of how your student is performing at this new level.  We urge you to take the time to determine what has gone right so far, and help it to continue, as well as finding the best way to correct anything that may have gone awry or presented a challenge.  At this point it is still early, and there can certainly be an adjustment stage. Encourage your student in every way possible toward achieving academic excellence.

College Strategies for the High School Freshman: Consider the Big Picture

Yes, schoolwork is a huge part of the high school equation when it comes to college preparation.  However, do not ignore an assessment of how your student is adjusting to high school emotionally and socially, as well.  Activities are a fantastic preparation for college and for life in general, whether they are science clubs, leadership, athletics, or other interests.  There needs to be balance, certainly, but this is one area that also needs parental support.  Parents can make a huge difference in a student in discovering his/her areas of interest, and so can extracurricular activities.

If you have already saved money for college, then it’s never too early to get your financial plan together

College Strategies for the High School Freshman: Protect the money you’ve saved.

If you have money saved outside of your company’s retirement plan, talk to your College Funding Advisor about re-positioning those assets into accounts that are not exposed to the financial aid formulas.

  • This strategy was used with permission from our College Planning Network.  It is one excerpt from our monthly email that gives tips and strategies to help students and families prepare for the college years.

Turn Daycare Dollars into a Diploma

Lately we have been focusing on early planning for your college needs.  We believe that the secret to saving for college, or saving for any reason, is to capture funds before they get re-allocated into other ares of spending.  This has been commonly referred to as Parkinson’s law.  This law was first outlined in a 1955 edition of the Economist magazine.  This simple law states that expenses will always rise to the level of income.  This is true: think of your last pay raise.  Where did that raise go? If you did not capture it for a particular purpose, it just got absorbed into you normal spending habits.  Well, here is a plan to help you resist Parkinson’s Law and turn daycare dollars into a diploma.

The Soaring Cost of Daycare

What would you say the average family spends for daycare?  The number may surprise you.  There are many sources to check for the actual numbers in your specific area, but a quick search lead us to 2-1-1 Childcare where we found that the average cost of daycare in our area was around $250.00 per week.  Even that cost varies significantly from area to area.  With a few punches on the calculator keys we found that the annual cost of day care is around $13,000.00 per year.  Over the course of 4 years, that would be roughly $52,000.00.

But what happens at the end of the daycare years?  First, there is usually a large sigh of relief, maybe a night on the town, but then the money usually gets absorbed into the normal spending habits.  If you fight that temptation and make a plan, you can save some substantial money for college.  This will take some discipline, but it will save your student thousands of dollars in debt later.

Turn Daycare Dollars into a Diploma

Let’s do some math.  If you were to capture $1,000.00 of those day care expenses and set it aside in a small savings account.  Let’s say that that savings account was earning 1%.  You would have to search high and low to find such a thing, but let’s just use it as a simple illustration.  We used bankrate.com to run a quick illustration.  At the end of 12 years you would have saved $144,086.83 for your student’s college education.   That is just one expense that can be captured.  Can you find some more?  Probably!

You can resist Parkinson’s law and turn daycare dollars into a diploma!  Want to know more?  Make an appointment with our office today.  We can help you design a plan to capture these expenses and not create a debt crisis for you and your student.

Unexpected Costs of College

College is one of the greatest investments in a student’s future.  As you plan for your student’s future, don’t forget the unexpected costs associated with college.  Many colleges try to show these expenses in their award letter, but it is hard to calculate these costs precisely simply because there are way to many variables.  Some of the costs are associated with particular majors, while others are related to the location of a particular college.  Let’s examine some of the unexpected costs of college.

The Unexpected Costs of College: Travel

No matter where a student attends college, they will have some kind of travel expense.  If you attend close to home, it may be as simple as a tank of gas and some fast food. However, If you are attending across the country, this cost could include plane tickets, perhaps some shipping expenses, or maybe even addition set-up costs.  In a recent College Parent of America article, “Top 7 – unexpected cost of college”, they listed college travel expense as one of the top 7 unexpected expenses.  You need to consider travel costs in the overall costs of college.

The Unexpected Costs of College: Books

Every student is going to need textbooks each semester, therefore, textbooks are also an unknown expense.  While we know textbooks are needed, the cost of textbooks is greatly dependent upon the chosen major.  Princonomics revealed that the cost of textbook is souring.  The average students spends around $1200.00 a year on textbook alone.  Princonomics breaks the cost of books down to show what majors have the most expensive textbooks.  You need to consider the costs of text books in your college planning.

The Unexpected Costs of College: Set-up

The student and family will also need to plan for “set-up” costs.  This expense includes: technology, learning supplies, dorm room supplies, toiletries, etc.  There is no way to figure out what these needs will cost.  There are just to many variables.  However, it is an expense that is often overlooked and therefore needs to be considered.  The best idea would be to establish a budget.  While textbooks and travel expenses are pretty inflexible, you may be able to make some small adjustments with your set-up costs that can lead to lower expense.  Make a plan, and if you start early enough, you may be able to take advantage of some great deals.

The unexpected costs of college can add up! Proper planning can alleviate some of the pressure of these expenses.  In upcoming posts, we will share some money saving ideas to help alleviate some more of the pressure of these unexpected costs of college.