Higher Education Doesn’t Have to Ruin Your Finances: Part One

The following are some budgeting, planning, and money saving tips for college students and their parents/financial supporters.

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Things you DO NOT NEED:
•  To Drain Your Retirement Fund
•  Parents with college age children are usually in their 40’s to 50’s, the prime years for them to be adding as much as possible to their retirement. Sure, you might not want your child to drown in student loans, but that is a debt that can be paid off over time. Taking out a loan to cover retirement costs is a much worse loan to pay off because it will more likely than not result in needing a job to supplement your savings or make big retirement budget cuts. Look for low-interest student loans or less expensive colleges.
•  New Textbooks
•  Students spend an average of $579 on school books for the 2016-2017 academic year. You can avoid being one of those people by buying used books or even renting them. E-books and library check outs are cheaper options, too. Make sure to shop around on major online retail and book rental sites for the best deals. Another tip is to keep your books in good condition so you can sell them back to the vendor or a friend when you’re finished using them. Finally, be sure to only buy the REQUIRED books for your classes. Some professors have optional books listed as well.
•  Car
•  People spend around $8,558 per year on their car according to AAA. Think about all of the expenses that come with owning a vehicle: gas, insurance, depreciation, maintenance, repair, licensing fees, registration fees, taxes, loans/leases, etc. Add a parking pass to all of that and you’re looking at a hefty sum that can be avoided by using a bike or public transportation.
•  Meal Plan
•  Well, you might need one, but probably not the most expensive one. Talk about and make a budget for food, look for roll over meal dollar options, and for options to add onto the plan later on if possible. If that is an option, buy a basic plan and add on as needed. If those are not options for you, be sure to buy the plan that makes sense for you and your personal eating habits. Usually, the most expensive plan is too big for one person to fully use.
•  (New) Technology
•  The biggest expense as far as unnecessary technology goes is printers. There is the printer itself, the paper, and the ink. They are not always needed either. Today, most assignments can be submitted online and paperless. Additionally, most campuses have printers on site to be used by students for a few cents per page or even free. Do some research and see if it’s really necessary.
•  Almost every student needs a laptop to do homework, research, etc. However, the most expensive model is not always justified by the extra cost. Before you purchase a computer, know what you will use it for. If your student will use it for basic things like word processing and checking emails, a basic model will suffice.
•  Some majors, such as coding or computer sciences, require a student to have certain software or extra hardware on their computers to complete their courses. These extras can be pricy, but the college will usually offer free instillation or instillation at a cheaper price than major providers.
•  Credit Card
•  It is a good idea to start building credit, but it is typical of college students to get themselves into serious credit card debt that they cannot pay off. Unless your student has a job and will be able to keep up with payments on time, it is best to avoid credit cards. They do not NEED one. They can use a prepaid debit card or cash to make purchases.

Now that you know what to avoid, you need to know what to do. Do you or don’t you fill out the FASFA? Do you keep your student on your medical plan? Do you open any type of bank account at all? All of these questions and more will be answered in our next blog post to be posted in three weeks! Stay tuned to get more advice on how to be smart about your plans for college spending. Can’t wait? Call us at (732) 936-1230 to set up an appointment to discuss budgeting options! At Mazur & Associates we are always happy to help.

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