Category Archives: financial planning

college costs, financial planning

Preparing for the High Cost of College

 

high cost of college

It’s no secret that college is expensive, and most parents will spend their working lives post-children saving for it. Unfortunately, there are no fixed costs when it comes to college, and fees and other expenses can rise and fall in line with the economy. Knowing what to expect when it comes to college expenses will help you and your child be prepared for the high cost of college, as well as be able to budget.

The rising cost of college

The cost of college has risen in recent years, and the same applies to universities all over the world. If you Google ‘the cost of college,’ you could be in for a bit of a shock. According to Forbes, going to an elite college could cost as much as $334,000 ($68,000 a year) by 2018, with four years at a public college costing up to $28,000 a year and private colleges $59,000 a year. While college has always been expensive, you might not have been expecting costs to be this high.

Housing

Some college fees will include the cost of housing and meals that make it easier for you to work out how much you’ll be paying for the basics. On average, you could expect to pay between $8,000 and $11,000 a year for this – depending on whether you go to a public or private college. If you choose a meal plan, this means you won’t have to worry about how your child will eat for the next four years when you say goodbye and can feel happy knowing that this has already been covered.

Housing costs, of course, can vary, and if your child is paying these costs themselves, they may not necessarily want to live on campus. Off-campus housing can often be cheaper, as there is a wider choice of properties available that they could share with friends and fellow students during their time.

Books

Books are another cost that can be unexpected when your kid goes to college. Book costs will vary depending on what they choose to study, but the average is around $1,200 and up to $200 a book. This is of course if you buy all of the books brand new, which is unnecessary in most cases.Many textbooks can be accessed online, and most college libraries will carry the books you need if you can get your hands on them.

Computers

Computers and other equipment are other costs you’ll want to factor in when working out the total cost of college. While it’s likely your child already has a laptop, it may be due for an upgrade by the time they leave for college. A laptop should last the four years of college, although it might be wise to invest in some insurance as well in case of theft or accidental damage. Another idea is to lease a laptop as a way to save money and to get an upgrade after two years without spending much more than it would have cost to buy the computer outright.

Entertainment and other expenses

Entertainment is another cost that will need to be factored in and might be where you draw the line at what you’re willing to pay for as parents. There are many hidden costs of going to college, including laundry and nights out. For these expenses, your child may need to consider a part-time job, or you could set them a monthly budget for these costs. This is the part that will teach them the most about managing their own money, and if they want to enjoy a more active college lifestyle than you are willing to provide – they will need to think about how they’re going to cover those costs.

Financing college

There are many ways you can finance college. While many colleges will offer a scholarship with their acceptance, you need to be prepared for the possibility that they may not. You can find ways to fund college without a scholarship and might want to consider grants, loans and payment plans to cover it.

For many parents, funding college will come out of your income. This will mean certain sacrifices while your child is at college such as vacations, a new car or home improvements. If things get tight, you might need to seek options for a larger payday from time to time. It might be a tough four years, but it will be worth it when your child earns their college degree.

Going to college is a huge achievement for your child, and for you as parents. The cost can be worrying, but there are other parents in your situation who have survived and made it through. Once you’ve worked out how to pay for college, you can look forward to this special time in your child’s life knowing that you’ve been able to help them on their way.

financial planning

Finding the Right Financial Strategy for your College-Bound Student

financial strategy

Parents have tough choices to make deciding on their financial standing when sending their kids to college. How much help should they offer? How do they make sure that their children learn financial responsibility? What is the best financial strategy?

Here are a few possible answers.

Paying for your child’s college is a good idea if you can afford it

Various positions exist on how fair it is to expect parents to pay their children’s tuition. Some experts point to the fact that college isn’t an essential because success is possible without college. Some believe parents should only be expected to pay for essentials. Those in favor of having parents pay point to the unfairness of the high cost of education today, and the terrible financial burden that loans place on a student.

Whichever side of this debate you may stand on, there are a few things to understand. College is a wise choice if the career that your child has in mind does require college. If it does, it is an essential, not a luxury. Ultimately, it is the parents’ choice on whether to provide support or not.

It is also important to understand that supporting a child through college doesn’t amount to coddling or spoiling them. The idea should be to pay as much for your child’s college as you can afford, without putting your own retirement into jeopardy. If you can only pay for tuition but not for board and lodging, that’s what you should pay. Encourage your student to contribute to the cost by working during school, breaks and during the summer.

Give your child a monitored credit card

Letting your kids have a credit card in college can be a risky choice because many have no idea how to use their newfound independence in a responsible way. They may go out and blow everything they have on the card.

A credit card with a low spending limit, however, can be a good idea. It’s when your kids blow their money and scramble to understand what they did wrong, that they begin to learn about how money works.

There are upsides to owning a credit card, too. As long as the card is in your child’s name, they will begin building credit, an important thing for when real life begins four years down the line.

Teach financial responsibility

Heart-to-heart talks about how money works are a part of gaining an understanding of money. You should talk to your child about savings, investing, payday loans, how banks and credit cards can help you with consolidation, how compound interest works and so on.

Talks are important because far too many young people go out into the world with an inadequate understanding of money.

Restraint is important, too

It’s a good idea to encourage financial responsibility by making your kids earn their rewards. While you should pay for your child’s college if you can, everything else like nice clothes and cars should be things they earn.

Finally, once you do have a policy in place, you should stick to it. It doesn’t work to start out with solemn declarations but to always bail your children out when there is trouble. Lessons will never be learned then.

financial planning, infographics

Credit Card Facts and Risks for College Students

1 Comment

 

It is easy to be lured in getting a credit card when you are in college. This is due to the expenses that you need to pay and the limited amount of money that you have.

Getting a credit card won’t be a problem if you know you are able to repay what you have borrowed. If you have a part-time job, go ahead and get one. Without an income source however, getting a credit card would be very risky.

Aside from the risk of not being able to pay your debts, you also place yourself at risk of a possible credit card fraud. A lot of naïve college students have fallen victim to credit card scammers. These are people who will do everything just to take your money away from you.

They have employed different strategies aimed at fooling people to provide their credit card information or online account passwords so they can make use of the credit card as their own. You can only imagine how devastating it would be if you are a victim of this scam.

If adults who have full time jobs have a hard time facing this kind of problem, you don’t want to imagine what could happen to you considering that you don’t even have a job. This is why you really have to stay protected. With the right knowledge on how to fight against these scammers, it is easy to stay away from them.

Below is an infographic giving you more information about credit card fraud. It also provides tips on how you can keep yourself protected against these bad people. You need to do everything so they won’t lure you into their scams and eventually report them to the authorities.

Credit Card Fraud Stats - Protect Yourself from Being Scammed