How Parents Can Budget for That First Semester of College
May 26, 2023
Sending a child off to college can be an exciting and emotional time. Before your child starts that first semester, it’s important to consider how to save and plan for college-related expenses. Here are some tips to get you and your family started.
Figure out the big picture
Thinking about the big picture, and weighing all your options, can be a helpful and sensible way to approach budgeting for college. From resources like financial aid and scholarships to taking out loans and paying some costs out-of-pocket, there are many ways to manage the cost of tuition, books, and housing.
Personal savings and other resources
Paying out-of-pocket is another option to fund all or some of your college costs. In addition to using savings you may have set aside, you may decide to utilize other resources, such as the cash value of a permanent policy like whole life insurance or universal life insurance.
Financial aid can help ease the cost of paying for college by providing you and your child with access to federal student loans, grants, and more. The primary way to apply for financial aid is by filling out the Free Application for Federal Student Aid (FAFSA®) form. After you fill out the application, typically, each college you’re admitted to will let you know what your financial aid package is.
Many students and parents take out loans to cover college costs. Loans can be public or private, and federal loans can be part of a financial aid package. You will have to secure private loans on your own, though schools may have a list of trusted lenders. With any type of loan, make sure you understand all the details, including repayment terms, timelines, and interest rates.
Remember supplies and books
College costs are more than just tuition and housing. Supplies and books cost money, too. If you’re looking to save, consider looking online for affordable options, including secondhand or used books. These costs add up, so be sure to factor these expenses in when planning out your finances.
Factor in spending money and trips home
When they aren’t studying, your child may want to catch a concert off-campus, have a dinner out, or take a trip home for some time away from papers, tests, and college life. Like anything else in your budget, it can be useful to keep spending money and funds for trips home in mind.
The primary purpose of permanent life insurance is to provide a death benefit. Using permanent life insurance accumulated value to supplement retirement income will reduce the death benefit and may affect other aspects of the policy.