$50. That’s how much tuition was at Yale in 1940. Today, you’d be lucky if $50 paid for even one of your child’s textbooks. For the 2020-2021 school year, Yale’s undergraduate tuition will be $55,500; tuition plus room and board will be $72,100.
Chances are, you’re not paying that much. But you probably consider the sizable chunk of money you’re shelling out for your children’s education to be a major investment. And you want to use that money wisely. That’s why it’s important to plan ahead by sitting down with your college student each year and putting together a budget.
Here’s a great place to get started: Review the expense categories below, plug your numbers into College Toolkit’s Cost of College calculator and get going. For a broader overview that takes into account your financial aid awards, try Student Loan Daddy ‘s own College Budget Calculator.
Beyond Tuition and Housing
Whether you’re the parent of a freshman, just trying to get your head around collegiate finances, or a tuition bill veteran wanting to rein in the spending of your university junior, there are several expenses (besides the obvious ones) you may want to consider when building your college budget.
The majors: tuition, room and board. Tuition will probably be your largest expense. As far as room and board, on-campus housing (including dorms or apartments) generally allows students to participate in a meal plan. This is a great way to save money, as off-campus living arrangements tend to be considerably more expensive, especially when you take into account the food costs.
Books. Every college student needs books. No matter how creative your kids are in saving money in this area, by buying used, sharing with a classmate or whatever, those textbooks, lab manuals and literature classics are still going to add up. It’s probably safe to figure about $600 or so per semester just for this category.
Other fees. Many parents fail to include extra room in the budget for computer lab fees, special class equipment (like a camera for photography classes) and other miscellaneous costs. These are usually assessed each semester and vary by school, so call ahead to know what you’re working with. (You may have to wait until your child’s classes start, since some fees aren’t charged until after enrollment.)
Computer. No longer just an option and seldom a luxury, every student needs one of these, and some schools even require one. As your kids will tell you, having to stand in line for an open PC at the computer lab no longer cuts it. Especially if they’re cramming for finals, and they haven’t even started on tomorrow’s term paper. Some colleges provide individual computers for students, but if not, an inexpensive PC should run you only about $700. Think about it this way: You want what’s best for your children’s future, right? A computer will help them get there.
Medical costs. One word: insurance. Health insurance covers not just unexpected emergencies, but routine visits to the campus doctor, which can help keep your children in peak physical condition so they can ace those exams and keep up with the demanding academic rigors of a college education. Check with your child’s college to find out which health plan is best suited to your needs and budget. If your kids like to work out, encourage them to use the on-campus weight room, gym or pool, which are usually free to students. If your children’s school doesn’t offer workout facilities, a gym membership may run you $20 to $40 a month.
Personal expenses. Your kids are going to want to spend some money on themselves, whether that means movies, eating out, iTunes downloads or laundry day. Our suggestion is to have your child’s part-time job fund this category. Broach the topic of part-time employment with your kids. Emphasize the significance of being able to hold down a job and learning how to live on a budget.
Car. Definitely a luxury. At least for the average college student during the first year of school. Not having a car can go a long way toward keeping your child out of trouble. But if you believe that a car is, in fact, necessary, and if you’re generous and financially able, then go for it. Don’t forget to allocate funds for a campus parking permit, gas, insurance, travel to and from home, and car payments. You may want to consider a subsidy arrangement where you agree to help with transportation costs, as long as your child maintains income from a part-time job.
Utilities. You’re a responsible parent who keeps in touch with your children. That may mean an inexpensive cell phone plan or long-distance telephone service for the dorm. If your child lives off-campus, you may need to set aside money each month for Internet access, cable TV, water, gas, electricity and trash pickup.
Being forced to live on a budget can drive you to find creative ways to cut back on expenses that may not be a hit with your college kids. Your teenagers, on their own for the first time at school, are probably not going to want to be kept on a financial leash. You, with your lineup of cost-cutting measures, are not likely to win any popularity contests. But if you can sit down as a family to discuss financial expectations and involve your children in the budget-making process, conserving cash can become a healthy habit instead of a battle. And when you get the buy-in of your children, they’re going to be more likely to cooperate than fight against your executive decision.