Sunday, February 14, 2016

Create Financial Checklist to Ease Transition to College

When it comes to paying for your child's college education, tuition's not the only expense to consider. There's also housing, books and supplies, travel, and more. You'll want to involve your student in the planning and payments.

We thought we had payment for our kids' college education all planned out. Then the unexpected expenses started kicking in, and our already tight budget was squeezed tighter than we'd thought possible. (Good-bye vacations, dinners out, new get the picture.) We hope this checklist will help you avoid making the same mistake.

First things first

With your student, determine your family's financial resources, looking at college savings accounts, your current incomes, and the amount you're willing to borrow. "It's good to involve your student, because they'll often end up borrowing too, or working part time, and you can decide together what makes sense," says Cindy Bailey, senior policy analyst at the College Board in New York.

The College Board's "Trends in College Pricing 2009" shows that, on average, a student living on campus at a four-year public university not in her home state spends $18,548 on tuition and fees each year, $8,193 on room and board, $1,122 on books and supplies, $1,079 on transportation, and $1,974 on other expenses, for a total of $30,916. An in-state student spends, on average, $7,020 on tuition and fees and the same amount as an out-of-state student on other expenses, for a total of $19,388.

Billable expenses

College Web sites list their specific costs for tuition, room and board, and fees, and estimated costs for books, supplies, and miscellaneous expenses. "Generally they include separate amounts for resident students, those living off-campus, and commuters," Bailey notes. "The tuition and room and board numbers are accurate, billable expenses; the others are ballpark amounts based on student surveys."

Families have discretion in managing the nonbillable, variable expenses, so it's important to identify each expense and determine how to handle it. "Sit down with your student and determine what's really needed, what's a luxury, and what amounts would constitute barely surviving," Bailey advises.

Other costs

When discussing expenses with your student, be sure to include these nonbillable items in the conversation:

  • Books—The cost will vary depending on your child's field of study. Our daughter who's studying acting requires very few books, while our daughter who's an engineering student needs books that cost about $600 a semester. Look into renting textbooks at sites such as or, or buy used books when possible at your school's bookstore or from sites such as or Barnes & Noble. Your student should sell textbooks promptly at each semester's end, before instructors switch to new editions.

    When discussing expenses with your student, be sure to include nonbillable items in the conversation.

  • Fees—These, too, may vary based on field of study. Our acting daughter pays studio fees; our engineering daughter pays lab fees. There also may be fees for attending orientation, and annual fees for things such as student activities, health services, and telecommunications. "These types of fees are increasing faster than tuition is," says Bailey.

  • Supplies—Again, there's a wide variance. Art students need to buy many more supplies than literature students, for example.

  • Health insurance—Your policy may cover your student, but, if not, most colleges require purchasing insurance.

    The new health-care legislation requires plans to provide dependent care coverage up to age 26 as plans are renewed after Sept. 23, 2010, if the child does not have access to his or her own employer coverage. Check with your employer for details.

  • Transportation—There's the cost of moving a resident student to school, potentially including hotels, gas, and meals, as well as trips home for holidays and parental visits to colleges. Students also may want to visit friends in other locations. Commuting or off-campus students will need to travel to campus for class. Most schools have "ride-share boards" so students can arrange to travel together and share expenses. Using public transportation is another way to cut costs.

  • Athletics, sororities and fraternities, and clubs—These programs usually charge fees, and there may be costs for outings.

  • Laptop computer—These days just about every student needs one, but it doesn't have to be top of the line. Campus libraries also have computers available for students to use.

  • Printing/photocopying—While many professors accept assignments via e-mail, others require hard copies. But printers usually are available on campus, so it's not always necessary to buy one.

  • Cell phone—Many students don't use the landlines in their residence halls and instead use their cell phones, a cost you or they already may be covering. Make sure your student's plan is competitively priced and has sufficient coverage where his or her college is located.

  • ATM fees—These can cost several dollars per transaction at bank ATMs if you don't have an account there. Credit unions that participate in shared nationwide networks, however, don't charge fees to other credit unions' cardholders.

  • Housewares—You'll likely need extra-long sheets to fit dorm-room beds. The cost of rugs, lamps, posters, and other items can really add up. Many students also rent or purchase refrigerators, microwaves, and small furniture items, as well. Try yard sales and discount outlets to lower costs.

    It's a good idea for your student to open a checking account before leaving for college.

  • Toiletries—From toothpaste and deodorant to hair products and cold remedies, your student will need his or her own supply.

  • Cleaning products—Some dorms provide vacuum cleaners; if not, your student may need one. He or she also will need dust cloths or wipes to clean desks and bookshelves. With suite-style housing, residents at some colleges also are responsible for cleaning their own bathrooms.

  • Laundry supplies—At the very least, students will need detergent, dryer sheets, and a supply of quarters for washers and dryers. A compact drying rack also may be helpful as a cost-friendly alternative to machine dryers.

  • Food and groceries—Dining halls are open only at certain hours, but students are hungry at all hours.

  • Social life—Every student needs the occasional pizza or movie night...but not necessarily fine dining or Broadway plays.

Who will pay for what?

After estimating your student's college expenses, discuss who will cover which ones, and where the money will come from. "There's no rule; it depends on your family," Bailey observes. She says parents of traditional-age students often pay for tuition, room and board, and possibly books and supplies.

Students may pay for their miscellaneous expenses with their summer earnings or through a part-time job during school. "This gives students the opportunity to make good choices—they're closest to the situation and can compare costs," says Bailey.

Most students use checking accounts with debit cards to manage their money. It's a good idea for your student to open an account before leaving for college, so you can help educate him or her about using the account and about money management. Your credit union staff can provide guidance as well.

And remember to keep the lines of communication open. "Have family conversations regularly so everybody is on the same page," Bailey recommends. Discuss how your plan is working, and make adjustments as needed. Does your student need to work full time next summer so he or she will have more spending money? Have you encountered surprise costs that you'll want to factor in next year? Careful planning will keep your student's budget—and your own—on track.

Online resources

NCUA Equal Housing Lender

  Home & Family Finance® Resource Center
  Copyright © 1997-2015 Credit Union National Association Inc.

Fort Knox Federal Credit Union