A college degree is essential.
It will provide students with the skills necessary to earn a living for the rest of their life. But it’s not cheap.
It’s estimated that the average student pays a total of $20,000 a year for all college related costs. Here are some steps to follow to formulate a financial plan so you can pay for college without going broke.
Depending on the ages of the child, you may or may not be ready to complete some of them. However remember that they are never too young for you to start planning (and saving money) for their college education.
Financing College Using a Multi-Pronged Approach
The first question that must be addressed is, “How are we paying for college?” Many parents will contribute all or some of the money to pay for their child’s education.
However some parents will not on the grounds that the education is directly benefiting the child and that it will teach the child the value of hard work and study.
Additionally, many parents feel, wisely so, that their own retirement savings need should be a priority. You can’t take out a loan for retirement. This is why you need a college savings plan!
Decide on Parent’s Contribution – If the parents have saved up money throughout the child’s early years, they likely have a decent sum of money to contribute.
They should decide how much of it will be spent each year and on what items (just tuition or room and board as well).
Decide on Student’s Contribution – If the parents are splitting the cost with the student, the amount must also be decided upon so that the student knows how much he will need to earn through working and scholarships.
Decide on Loans to Be Taken Out – If the parents and student do not have enough money to cash flow the costs of college, they will need to apply for and take out loans .
Both the student and parent can take out separate loans. These should be investigated and applied for during the student’s last year of high school.
Apply for Scholarships – Many scholarships go unawarded each year. Students should set aside a few hours a week asking around the community and searching on-line for all of the scholarships which they are eligible for.
Make sure to follow all the applications procedures correctly (including essays and high school transcripts) so as to increase the chances of winning a scholarship.
Planning for the financial burden of college can be a daunting task, although schools like Phoenix University do make life easier with financial aid programs and affordable tuition.
Find a Part Time Job – Most colleges advise students to spend at least 10 hours a week working at a part time job. This will help them learn to prioritize their time as well as provide income to pay for school or provide spending money for them.
Strategies for Cutting College Costs
Create A Budget – Any good college savings plan will work together to create a workable zero balance budget for the student. The amount of money coming in should not be less than the money being spent each month. This is good to start doing during high school so as to become habit.
Buy Used Textbooks On-line – Textbooks are a huge cost for students but what the professors won’t tell you is that you can save as much as 90% off the book store price by buying used books on-line.
Wait until you have a chance to ask your professor if an older edition is acceptable. Even if you can’t buy the previous edition you can still save big by getting them on-line. After the class is done, resell them on-line.
Buy School Supplies on Sale – School supplies are cheapest in August so buy enough to last all year.
Shop Sales and Use Coupons – Throughout the year, when shopping for clothes or just going out for dinner, be sure to check sales fliers and use coupons to get the most of your dollar.
Consignment shops and ‘buy one, get one free’ dinners are some of a college students best friends! Hopefully this has helped you in creating your college savings plan.