Preparing Your Finances for College

According to the National Center for Education Statistics, the average cost of undergraduate tuition, fees, room, and board for the 2018-19 school year was $18,383 at public institutions, $47,419 at private nonprofit institutions, and $27,040 at private for-profit institutions. That’s why getting accepted to college is only half the battle.

Once you get that acceptance letter, you have to figure out how to pay for it. Whether you have financial support from family or will be paying for your own education, the sticker shock for college can be alarming. Tuition alone (not including room and board) has increased by 33% in the last two decades. However, there are always ways to reduce what you pay for college, including starting at a community college, applying for scholarships, and qualifying for financial aid. In this article, we’ll offer 6 ways to prepare your finances for college!

Earn money prior to leaving and get a job near your school

Even though your professional life hasn’t started yet, it’s never too early to get into the workforce and start building your savings to pay for your education and other expenses while you’re at college. There are seasonal positions available throughout the summer, or you can try to get a job at a business that is related to your future area of study. Any work experience that you gain now will be helpful when you’re searching for a job during and after school. 

Once you get the lay of the land in the town by your school, you may want to scope out a job that works with your class schedule. You might even want to ask around the school to see if they offer work-study programs or other on-campus opportunities, such as working in the bookstore or gym. You could also advertise your services as an academic tutor for younger students or give music/athletic lessons if you have a talent in one of those areas.

Budget for expenses

In addition to tuition, housing, and food, you’ll also need to think about the cost of books, supplies, transportation, utility expenses, and discretionary spending on entertainment/going out, etc. Once you have an idea of one-time expenses, like books and supplies, you’ll be able to build out a budget for your regular expenses. Practice budgeting now, so you can build this important financial habit into your lifestyle. This will benefit you in the future and allow you to stay on top of your finances and maintain financial health. 

You can budget with just pen and paper or a simple spreadsheet or, if you want to get fancy, there are a variety of free and paid budgeting apps out there. You can even link your checking and savings accounts to your budgeting program to make it easier to track spending and savings goals. We even offer our very own Online Financial Management Tool, which allows you to view how well your spending targets and habits sync up with your savings goals.

Know your financial aid options

To qualify for federal aid, you need to complete the FAFSA each year. This form calculates your expected family contribution and will tell you if you’re eligible for financial aid. 

Once you enroll in the college of your choice, you’ll receive information on any academic or income-based scholarships you qualify for. Whatever is left, you’ll need to pay for out of pocket or with student loans. Direct Loans are the main federal student loan program with the U.S. Department of Education as your lender. 

• Direct Subsidized Loans: Made to eligible undergraduate students who demonstrate financial need to help cover the costs of higher education. Subsidized means that no interest accumulates on your principal while you are enrolled in school.
• Direct Unsubsidized Loans: Made to eligible undergraduate, graduate, and professional students, but eligibility is not based on financial need. You can either make interest payments while in school or accrued interest will be added to your balance.
• Direct PLUS Loans: Made to graduate or professional students and parents of dependent undergraduate students to help pay for education expenses not covered by other financial aid. Eligibility is not based on financial need, but a credit check is required. 

Build your credit score without taking on unnecessary debt

As soon as you turn 18, you can start building a good credit score and history for yourself. The easiest way to do this is to sign up for a credit card, but you need to be careful not to overuse or abuse it with unnecessary spending. Start by choosing one monthly expense to use it for, such as gas or groceries, and be sure to pay off the balance each month. Put a limit on your spending so that you don’t overspend and build this limit into your budget. You will want to start building your credit sooner than later, but you need to do it wisely. Take advantage of your phone by setting reminders to pay off your card and other bills. Our Online Banking platform also has unique features that allow you to add reminders as well as automatically pay bills directly from your accounts. You will already need to pay off your student loans, which will also help you build your credit score, but you won’t want any high-interest credit card debt or other loan debt on top of this. 

Start applying for scholarships and financial aid

Ideally, you should be applying for scholarships and aid well before you start school. This will help you decrease the amount of money that you’ll need to borrow to get through school, decrease student loan payments, and make your life more bearable. Beyond federal aid, you can apply for a variety of private scholarships. Use this helpful tool to search for scholarships you may be eligible for. 

Save money by living at home and commuting to college

Stay local and reduce your expenses by living at home, starting at community college, and/or taking advantage of local, private colleges that offer an abundance of scholarships or in-state tuition at one of Illinois’ state schools. Click here to view a full list of four-year colleges and universities, community colleges, and trade schools in Illinois.

Open a checking or savings account with Town and Country Bank and Peoples Prosperity Bank!

At Town and Country Bank and Peoples Prosperity Bank, our mission is to empower the financial well-being of our communities, one person at a time. Contact us with questions about how we can help you further prepare your finances for college or to learn more about our checking and savings solutions today!