When we have children, we realize that raising them will be expensive, but perhaps we don’t realize exactly how costly they can get. We are more than willing, in fact we are delighted, to invest in their future, but how do we do that while at the same time protecting the financial stability of our family unit?
To help answer that question, we asked a group of over 160,000 parents what financial issues they wish they had been aware of when their first child went away to college.
6 financial issues to consider before sending teens to college
Additional Costs:
From books to extra meals to Parents Weekend, it is clear that when parents considered the cost of attending college, most thought only about tuition and room and board. But there are additional fees that need to be factored into the calculus of a total education budget.
There are ways to save on those fees, for instance you can buy used books or rent them at retailers other than the campus bookstore. You can plan ahead for Parent’s weekend or pick another time to visit for lower travel expenses. But you need to be aware of these extra costs in order to mitigate them.
Outfitting the Dorm Room:
Our kids need sheets, pillows, blankets and a plethora of other items, but they don’t need it ALL on day one. It turns out that this generation of kids who are technologically proficient are perfectly capable of figuring out what they need and how to get it sent to them. If they have the maturity to attend college, they are mature enough to get what they need. So, buy what they absolutely need now, but let your kids fill in once they have moved in and have a better idea of what they need.
Meal Plans:
Most schools have several meal plan options and choosing wisely as a Freshman is difficult because you just don’t know what your schedule or school eating habits will be. Most kids will figure it out by Sophomore year. In the meantime, they may need to supplement the meal plan they’ve chosen, and that can get pricey. Talk to them about keeping the food budget reasonable.
Auto Insurance/Car on Campus:
Will your teen have a car to campus? If so, how much will it cost for a parking sticker? And when they inevitably get parking tickets, who is responsible for those? Of course, someone will need to continue paying for auto insurance. Teens are notoriously risky drivers – according to a recent Liberty Mutual survey, nearly half (47%) of teens report using their phones while driving or at red lights to respond to incoming messages.
This type of behavior can affect your insurance rates. With that in mind, take a look at what discounts might be available to you. Here are some ways that Liberty Mutual offers its customers an opportunity to save money on car insurance.
With three sons I’ve seen my share of car accidents. After my middle son’s first fender bender, when the mechanic learned the age of the driver, he glumly recommended that we not do body work “just yet,” because he was certain there would be more work to be done in the future. Unfortunately, that man knew what he was talking about
If you’re buying your teen a car or they have saved their money to buy themselves a car, invest in as many safety features as your budget allows.
Transportation:
Getting back and forth from campus to home is a cost that many people seem to forget. We all know that plane tickets can be steep, but the train can be surprisingly costly as well. Planning ahead is your best hedge against high prices, but it’s not always possible. In addition to visits home, often kids want to visit friends at other schools. And Ubering around your campus town can also be expensive. Make a reasonable transportation budget for the year and try to stick to it.
Moving is a Constant/Renter’s Insurance:
We tend to focus on Freshman year move-in, but most college kids move every year. We have helped our sons with so many moves now, from dorm to dorm, from apartment to apartment, I’ve truly lost count. But moving, furniture and storage can be costly. And at some point, either as an upperclassman or as a graduate, your student will rent an apartment. Even if the landlord does not make it mandatory, this might be the perfect time to discuss Renter’s Insurance with them.
Your young adult needs to consider what would happen if they are displaced or lose their clothing, furniture or their electronics? Considering these potential outcomes is a big step in the “adulting” process.
Renter’s Insurance from Liberty Mutual is property insurance that is available to anyone renting or subletting a single family home, apartment, duplex, condo, studio, loft or townhome. In fact, some off-campus housing options may require your student to get renter’s insurance. In any event, it’s a good idea to be protected. (1) Finally, if you bundle your home (including renter’s insurance) with auto insurance at Liberty Mutual and you can qualify for additional discounts.
The anxiety leading up the departure is WAY worse than the actual send-off. Everything you taught them is rattling around in their brain somewhere. They will become financially literate and they will learn to take care of themselves. Homesickness will pass, and you will all adjust to the new normal. You may even find you enjoy it.
Starting out is hard. We parents get that, and we want to help. We want to support our kids’ burgeoning independence when we can. Our goal first and foremost is to keep them safe, while keeping ourselves solvent.
Additional information:
(1) Standard renter’s coverage comes with every renter’s policy and covers the basics like your stuff, a place to stay if you are displaced, and injury or property damage to others. You can then customize your policy with a series of add-ons, that depending on where you are located in the country may be more or less meaningful to you. Add-on insurance items may include your most valuable items, your phone and computer, your identity, earthquake damage, replacement cost for your belongings and water damage
