It’s college acceptance season, meaning many students will now be deciding which college they’ll be heading to in the fall. However, although students may get accepted to every school they’ve applied for, it’s not always possible financially for them to attend. And with the fate of student loan debt still hanging, many have to decide what to do without knowing what could happen.
Here is how parents can know if they can financially afford college for their kids, and what easy things they can do to prepare financially:
How to know if you can afford it
Look at the numbers
Knowing what college can and can’t fit into your budget starts with looking at your financial situation. Look at how much attending the college would cost each semester for 4 years, as well as how much you save each year/what your salary is. If you’re still in the green, then you can afford to pay for the college. Take into consideration any financial aid such as scholarships, grants, etc. that your child is eligible to receive each semester as well. Check out resources such as this Net Price Calculator from the Department of Education that can help you determine an exact cost amount.
Preparing for college
Plan to use your windfalls
Are you expecting a big refund check when you file your tax return this year? Maybe you’ve got a profit-sharing check or end-of-the-year bonus coming your way?
Regardless of the source, if you’re expecting to receive a sizeable chunk of money in the near future, then earmark it for college costs. Depending on the size of this windfall relative to your payments, it may be enough to cover them for a few semesters.
One helpful way to keep yourself from using this windfall on something else is to partition it from the rest of your money. This can be done easily by putting it in a separate savings or checking account. Once this money is “out of sight, out of mind”, you won’t be nearly as tempted to spend it.
Take up a side hustle
While your kid can also get a part time job to help with costs, if you’re able to pick up a money-making pastime, you should. Side hustles are great because they’re extremely flexible. There are literally thousands of different things you can try based on what you like or are willing to do.
For example, you could:
- Become a rideshare driver using Uber or Lift
- Deliver food for Grubhub or Uber Eats
- Grocery shop for other people with Shipt or Instacart
- Become a freelance writer, graphic designer, or social media manager for clients on Upwork or Fiverr
Want some more great ideas? Check out this list here.
Adjust your budget
Just like any other major expense, adjusting your budget is the most effective way to afford college for your kid. Don’t have a budget? Then use this guide to learn how you can easily create one. Any good budget is really just a balance of income and expenses. As long as the sum of your expenses doesn’t exceed your income, then you’re off to a good start.
Again, if you’re going to be in the red because of the cost of college, then you’re going to want to make some adjustments immediately. Start by taking a hard look at your discretionary expenses like eating out or entertainment and decide where cuts can be made. It may be hard at first, but it’s what needs to happen to make sure that you and your child don’t go into debt.
Help students look for scholarship
Students can apply for scholarships before and during college. There are a variety of scholarship opportunities available, and they are typically awarded on merit whether for academics, athletic ability, talents, etc. Sitting down and helping students apply for scholarships can be a great use of time. For every 40+ hours, most students will receive around $10k or more in scholarship money. Most schools have scholarship opportunities available on their website that can be easy to find with tips on how to apply and even external links to other scholarship sources and opportunities.