College Out-of-Pocket Expenses
With FAFSA delays college finances remain uncertain…work on a plan for your out-of-pocket expenses while you wait for clarity!
FAFSA has announced more delays in relaying information to colleges, which means that financial aid packages could be delayed, and some colleges are already pushing decision day out a month from May 1st to June 1st. Needless to say, all of this is frustrating but out of your control! So instead of feeling stressed and worried, use this time to work on your college cash flow plan so you are ready for anything.
There will be out-of-pocket expenses once your student goes to college. Developing a college spending plan can help you identify the out-of-pocket expenses for the year, so you know what to expect. Having this awareness will help you determine if you already have the cash on hand or if will you have to adjust your “normal” spending to build up more cash reserves. Below is a list of potential out-of-pocket expenses you can start planning for:
- College Payments– Once your child commits to their college of choice, you will have to make a down payment ($50-$500) immediately. Then you will make lump sum payments for each semester (or trimester depending on the school’s schedule). Some schools offer monthly tuition installment plans but beware of fees. Now is a good time to make sure you know how to make withdrawals from your 529 Plan.
- Travel– Travel is not a qualified 529 Plan expense, so travel may be an out-of-pocket expense for your family. Perhaps you will need to make a last-minute trip to visit a school or two before your student can decide on which school to attend. Also, if your student will be going to college out-of-state planning for trips to return home for holidays needs to be factored into your out-of-pocket expenses. Also, will you go to parents’ weekend in the fall? You will want to set aside funds for this too.
- Dorm Supplies– Your student may need some supplies for their dorm room/apartment. Many colleges now offer on-campus apartments, they typically come furnished, but your student may need kitchenware, bedding, and storage solutions.
- Student Club Memberships– Does your student plan on joining a fraternity, sorority, or other club? These membership fees and costs are out-of-pocket expenses.
- Dining Out/Entertainment– Set a budget with your student. The dangerous combination of food delivery services, peer pressure, and a busy college student can really rack up food expenses.
Be gentle with yourself, this is a big life transition. I found this time particularly joyful with my two sons! They both went to public in-state schools that they were thrilled to be attending. It is really fun to watch your kids fly away from the nest! My husband and I are still navigating many of these out-of-pocket expenses (we have a Senior at UCSB living in an off-campus apartment). There will be unexpected things (parking tickets, crazy food bills, etc.), just keep talking with your student and adjust the plan when it is no longer working.
