Prepare Your Finances and Your Freshman for their First Year in College

By on January 13, 2018

Congratulations on your child’s acceptance to the college of their (or your) dreams. You have been saving for years into that college fund, and now it is time to start using it. First tuition payments for the fall are currently due, and while you have been good about putting money away, you now need to start changing your mindset.

4 Expenses You Are Guaranteed to Have Freshman Year

Tuition and On-Campus Housing Payments

College tuition follows a pretty easy to follow schedule. It is due at certain times, and the prices are always clearly labeled. However, prices can change semester to semester. A well funded savings account, insurance cash-value loan or 529 plan should cover these expenses and the inevitable rising prices across the course of the next four years.

Your 529 plan or other college specific savings should be used to cover these expenses. You can even cover most expenses related to room and board, because they follow a similar schedule. Be prepared to not see a refund for unused meals on that meal plan, since most freshmen are required to get one and will not be reimbursed. However, some schools will refund unused meals to non-freshmen, though this does change school to school.

Apartment Life

Some students will choose apartment living over the dorms for a variety of reasons Establish a budget for which type of off-campus housing that you can afford with the amenities your student needs to function. Look at the different features offered by each apartment complex to see if it makes more financial sense to live in one or the other.

This can be an excellent time to sit down with your student and discuss the finer points of personal budgeting and paying their own way for certain things. If a dorm and meal plan will cost you $4000 ($800 per month of a 5 month long semester), offer that to your student as a budget for their monthly rent, utilities, and food budget, and any additional funds required will require input from them either from their savings or from them getting a job.

Since college savings plans require that your withdrawals are only for qualified expenses, talk to a financial planner or tax professional in your state to ensure that you are following all laws regarding how you withdraw money for these expenses.

Books and Other School Supplies

This is one of those areas that can quickly zap your funds from that savings plan. Books can cost up to a thousand dollars per semester depending on the program of study and course load. While that does not seem like a lot compared to tuition, it can end up costing the equivalent of an additional semester’s cost by the end of the four years.

Also, depending on the program of study, you can end up paying a large amount out of pocket for school supplies, whether it is for science labs or art school. You also may need to purchase specific computer programs for your student to be successful. While anti-virus programs are usually given out for free by the school, high-end statistical programs or audio/graphic/video editing software will come out of your pocket.

To combat these potentially daunting costs, shop around. Your school bookstore and the town’s private version of it will both charge large amounts, which the school often sees as kickbacks in the form of endowments or scholarships. Check out alternative buyback stores or for better deals on the upfront cost of your books. Talk to the campus ambassador that took you on your tour, they are the experts and might know where the local place is to buy cheaper.

Many internet retailers have better prices, but be sure to go to the bookstore to get the exact edition that you will need, since some textbooks can have over a dozen different editions. And at the end of the semester, even though the school buys back textbooks, you will only see a fraction of what you spent, and chances are, you student is pocketing that money and not reinvesting it for next semester’s books.


This is an area that catches a lot of people off guard. The biggest rule here is that you can NOT use your 529 savings plan for incidentals. It can only be used for qualified purchases directly related to education. Even if your student is commuting from home and their car breaks down, the cost of repairing the car, even though necessary for school does not qualify. You will need to speak with a tax professional regarding this to not suffer any penalties.

Depending on how close you are to both the campus and your child and their financial needs, expect to still contribute money to their daily living expenses if they do not have a job. Some parents require a job, while others require that the student focus more specifically on their grades. Depending on your family’s needs and goals, expect to still be spending a portion of what you were saving each month on your child while they are away.

Feeling the Sting a Little Less

While some of these items may sound scary, they really are not. These tips are meant only to shift the mindset that you have had for the past 18 years into a new one. If you are having trouble, reach out to your trusted financial advisor to help you make the appropriate adjustments.

Be sure to discuss other financial products which can help you save more money or qualify for low-interest loans to overcome compounding college expenses. In addition, ask about money-saving education tax credits and how to get the most out of both those credits and your college savings plans.

To prepare yourself, look to parent groups for guidance. Other parents will be able to shed some light on what to expect from their personal experiences. This will help you prepare for the unexpected little expenses associated with having a student in college.

If your student goes away to college, check out as many aspects of the town and costs of living for the area as you can. Sit down with your student and set up both budgets and boundaries for their expenses. Talk to them about properly spending their money and getting a job as needed (work-study or regular) to both help the tuition and daily expenses.

As with anything, always plan for contingencies with your spending. Make sure that as a family you are spending your accrued savings appropriately. If you are only following a specific college savings plan designed by your financial advisor, make sure that you still keep saving money for emergencies so you are not caught unaware by an unfortunate circumstance.

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About Arthur Conway

FSN finance and investment journalist - Arthur understands the confusion and difficulty individuals encounter budgeting and saving for everyday expenses, college and wealth building investment. Professionals are there to help, but first, Arthur wants to put the reins to your financial future back in your hands with just a little bit of knowledge and clear advice. Connect with Arthur at !

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