It’s never too early to start planning for college. In fact, the earlier you start, the more likely you are to be able to afford it. There are a lot of things to think about when preparing for college financially but don’t worry, we’re here to help!
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In this article, we will discuss some tips on how to save money and reduce your expenses so that you can afford to go to college. Follow these tips and you will be well on your way!
The Average Costs of College
Before we dive into the different strategies, let’s first take a look at the average cost of college. According to The College Board, the average cost of tuition and fees for the 2018-2019 school year was $10,230 for state residents and $26,290 for out-of-state students. This may seem like a lot but when compared to private non-profit colleges ($35,830 per year), the cost is actually quite reasonable.
The Problem With Student Loan Debt
The problem with student loan debt is that it’s often not dischargeable in bankruptcy. This means that if you can’t make your payments, you could be stuck with the debt for years to come.
This debt can quickly snowball and become unmanageable, especially if you’re not making a lot of money after graduation. For example, if the economy takes a turn for the worse, you could find yourself unemployed and struggling to make ends meet.
Your monthly cashflows will also be hindered as each month a good chunk of your income will be going towards loan repayments. If you’re not careful, you could find yourself in a tight spot financially.
One way to avoid this problem is to start saving for college early. If you can save up enough money to cover your tuition and living expenses, you’ll be in much better shape when it comes time to pay off your loans.
Another option is to look into scholarships and grants. There are many organizations out there that offer financial assistance to students who need it. Do some research and see what might be available to you.
Finally, consider working during college. A part-time job can help you cover some of your costs and get a head start on paying off your debt. Just be sure to budget carefully so you don’t end up in over your head. Make sure to keep reading as we go into these strategies in more detail and other ways you can financially prepare for college.
How To Financially Prepare For College (Reducing Expenses)
Now that we know the average cost of college, let’s discuss some ways to reduce your expenses.
Strategy #1 – Live at home
One option is to live at home while you’re in school. This can help you save on room and board, which can be a significant expense. If you’re able to do this, you’ll be in a much better position to pay off your loans when you graduate.
Strategy #2 – Join a co-op
Another option is to join a co-op program. With this type of program, you’ll live and work with other students. This can help you save on costs like rent and food. It can also give you a chance to earn money while you’re in school.
Strategy #3 – Take advantage of financial aid
If you need help paying for college, don’t be afraid to take advantage of financial aid. There are many options available, including grants and loans. Be sure to fill out the FAFSA so you can get an idea of what might be available to you.
Strategy #4 – Get out of credit card debt
If you have credit card debt, now is the time to get rid of it. The interest you’re paying on your debt can add up quickly. This money could be better used to pay for your education. The average credit card APR is currently about 17%. This means that if you have a balance of $1000, you’re paying about $170 in interest each year.
Credit card debt can quickly compound if you’re not careful. If you’re carrying a balance, make sure to pay more than the minimum payment each month. This will help free up some cash flow as you are paying off your debt.
Strategy #5 – Create a budget
Finally, one of the best ways to prepare for college is to create a budget. This way, you’ll know exactly how much money you have coming in and going out each month. Without a monthly budget, it’s easy to overspend and find yourself in debt.
There are many budgeting tools available online. Find one that works for you and stick to it. This will help you stay on track as you’re working towards your financial goals. Don’t wait until you are in college to start budgeting. Developing sound financial habits while you’re still in high school will help you make better decisions when you’re on your own.
How To Financially Prepare For College (Creating Sources of Income)
In addition to saving money, you can also look into ways to create multiple sources of income. This can help you reduce your reliance on loans and make it easier to pay off your debt when you graduate.
Strategy #1 – Start Working Early
One option is to get a part-time job while you’re in school. This can help you cover some of your costs and start chipping away at your debt. Just be sure to balance your time carefully so you don’t end up sacrificing your grades. Even if you are still in high school, you could look for a part-time job. Many students work in restaurants, grocery stores, or retail.
If you can get a job within your field of study, that’s even better. Not only will you be making money, but you’ll also be gaining valuable experience. To get a job that relates to your industry, make sure to network with professionals and look for internships. For example, if you’re interested in a career in medicine, you could look for an internship at a hospital or research facility.
Strategy #2 – Sell Your Stuff
You can also start to sell some of your belongings. If you have clothes, furniture, or electronics that you don’t need, you can sell them online or at a garage sale. This can help you free up some extra cash to put towards your loans. Dorm rooms are typically quite small, so you probably won’t need all of the furniture that you have. You can also sell textbooks at the end of each semester.
Strategy #3 – Participate In A Work-Study Program
Another option is to participate in a work-study program. With this type of program, you’ll be able to work and earn money while you’re in school. This can help you cover your costs and get a head start on paying off your debt.
Strategy #4 – Start A Side Hustle
Another source of income can be from a side hustle. This could be anything from freelancing to starting a small business. If you’re able to make some extra money, it can go a long way toward helping you pay off your loans.
For example, you can start freelancing as a writer, graphic designer, or web developer. Or, you could start a small business selling products or services online. There are many opportunities available if you’re willing to put in the work.
Strategy #5 – Make Money From Your Hobbies
Another option is to make money from your hobbies. If you’re good at a particular skill, you can start offering your services to others. For example, you could start a pet-sitting business or offer your services as a tutor. This can be a way to make some extra money while also doing something you enjoy.
Making extra money can be a great way to help you pay off your loans and reduce your debt. There are many different ways to do this, so be sure to explore all of your options. With a little bit of effort, you can make a big difference in your financial situation.
Common Financial Mistakes When It Comes To College
To prepare for college financially, it’s helpful to understand the common money traps and mistakes that can trip up college students and their families. Here are some of the most common financial mistakes when it comes to college.
Not understanding all of the costs associated with attending college: The cost of tuition is just one part of the overall cost of attending college. There are also costs for things like room and board, textbooks, and other supplies. Make sure you understand all of the costs associated with attending college so that you can plan accordingly.
Failing to fill out the FAFSA: As mentioned earlier, The Free Application for Federal Student Aid (FAFSA) is the key to accessing federal financial aid for college, including grants and loans. If you don’t fill out the FAFSA, you could be missing out on money that could help pay for college.
Not knowing about scholarships and other types of financial aid: There are a lot of different sources of financial aid for college, including scholarships, grants, and loans. Make sure you do your research so that you can take advantage of all the money that’s available to you.
Assuming that you won’t get financial aid: Don’t assume that you won’t qualify for financial aid just because you or your family make a lot of money. There are a lot of factors that go into determining eligibility for financial aid, so it’s worth filling out the FAFSA even if you think you might not qualify.
Not budgeting for college: College is a big expense, and it’s important to budget accordingly. Make sure you understand all of the costs associated with attending college and create a budget that includes all of your expenses. New unforeseen expenses are often things such as travel costs for internships or job interviews, so be prepared with a buffer in your budget.
Failing to understand student loans: Student loans can be a helpful way to pay for college, but it’s important to understand how they work before you take them out. Be sure to research different types of loans and compare interest rates before you borrow.
Failing to plan for repayment of student loans: If you take out student loans, you’ll eventually have to repay them. Make sure you have a roadmap of when and how you’ll repay your loans so that you don’t end up in over your head.
Conclusion
There are many ways to prepare for the cost of college, and it’s important to do your research. By taking the time to understand your options, you can make the best decision for your situation. Just remember, if you’re struggling with student loan debt, you’re not alone. There are resources and strategies available to help you get out of debt and on track financially. Stay positive and keep working towards your goals! You can do it!
The first step is to start saving early. Even if you are just starting high school, it’s never too late to start saving for college. The sooner you start saving, the more time you will have to grow your savings. There are a few ways to save money for college, such as opening a savings account specifically for college expenses or investing in a 529 plan.
Remember that the fewer loans you have to take out, the better. You will want to avoid taking on too much debt, as it can be difficult to repay. If you do need to take out loans, make sure you understand the terms and conditions. Be sure to shop around for the best rates and repayment options.
There are many ways to reduce the cost of college and prepare financially. By taking the time to research your options, you can make the best decision for your situation. With careful planning and execution, you can make your college experience more affordable and less stressful.
What are some of the ways you have prepared for or are currently preparing for the cost of college? Share your tips in the comments below!