If you're entering college in the near future, it may be too late to save over a long period of time. However, saving for college just before entering and even during your time in college is possible. It's never too late to plan for college expenses.
Saving for the Future
Saving for college can be a big responsibility. Whether you're a parent raising a future college student, a recent high school graduate, or an adult preparing to go back to school, there's no quick solution to saving up a large amount of money needed for a higher education. However, there are several smart ways you can save for college no matter what kind of timeline you're looking at. Here are five suggestions to help you on your way towards a paid college education.
A Realistic Look at Tuition Costs
In order to save smart, you have to live smart and that means taking a proactive step towards saving for your college education. It may sound obvious, but you can't wait until it's time to enroll and hope for the best. Sure, there's the possibility of scholarships or even full rides through sport or academic programs, but if those don't pan out, what will you do? It pays to plan ahead and save from the earliest moment possible and here's why.
In the 2016-2017 school year, the average two-year community college tuition was $11,580, which included tuition, fees, room and board. The average four-year in-state college cost was around $20,090 and the average out of state college fee was $35,370. All of these costs pertained to public schools. The average cost for a private four-year college was $45,370.
Tip One: The 529 Plan for Long-term Savings
The 529 plan is one of the more cost efficient ways to save for college. For parents or individuals planning long term, a 529 savings program is the way to go. The plans vary by state and financial institutions providing them; however, their main goal is to enable families to set aside funds for college in a tax-free savings account. The funds can be used to pay all college or grad school related expenses. In most cases, the state based 529 plans can be used even if you attend an out of state college. If you have the ability to prepare ahead of time, the 529 savings option is your best bet.
Tip Two: Apply Early
Once you have decided that you will be attending college, start looking at your top pick schools and apply as soon as the application period is open. Not only do you want to make sure you're one of the first applicants in order to secure a spot, but you also want to be one of the first applying for financial aid or scholarships. There's only so much money available to assist future students. Be sure to fill out your financial applications, like the FAFSA, at the same time for the best possible funding as well. Applying early is one of the smartest ways to save and it doesn't cost you anything but preparation time. If you need help with your college pick, check out the article 'How to Decide Where to Apply to College'.
Tip Three: Sacrifice to Save
If you're looking to enroll in college in the near future, then you don't really have the luxury to start a savings account and set aside funds over a period of time. Instead, you'll need to crunch some numbers and determine where you can sacrifice in order to save. For instance, the tuition fees mentioned earlier include room and board. One way to save smart is to cut out the room and board fees and live at home. If possible, live with your parents until you complete college. This drops tuition for a community college to $3,520 and a four-year in-state college to $9,650. You will save almost half of your college expenses simply by living at home.
If living at home with your parents isn't an option, look for your own apartment to rent with one or more friends. It may not save you half of your college fees, but it may help cut down on your overall costs.
Tip Four: Purchase Text Books Off Campus
Typically, the cost of textbooks is not included in the initial college tuition fees. This means you will need to add an average of $1,000 or more to your tuition cost. One way to save smart and cut this cost is to buy your course textbooks from a bookstore outside of your school. Many on-campus bookstores mark up the prices of books in order to provide for their own operating costs. In 2015, the price of college textbooks jumped an incredible 812% in price compared to the previous generation of college students purchasing textbooks. Before you purchase your textbook, check local bookstores and online bookstores for a cheaper option. Some online stores, like bookrenter.com, even allow you to rent the books instead of purchasing them.
Another note, make sure you absolutely need the textbook before purchasing it. Your course list may state a certain book is needed, but your professor may tell you otherwise. Wait before purchasing in order to save.
Tip Five: Become a Working Student
Another way to save smart for college or to save while in college is to become a working student. This may involve working as a professor's assistant, tutoring in a specific subject, helping students in the writing lab, or even working part time in the college cafeteria or campus bookstore. No job is too small when you're looking to save on tuition or earn a little extra cash to pay for books, rent, food, and more.
Don't let college expenses keep you from pursuing a higher education. Take the time to plan and look for ways to save before, during, and after college.
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