This post is sponsored by Liberty Mutual Insurance, but the opinions expressed are our own.
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 125,000 parents what financial issues they wish they had been aware of when their first child went away to college.
7 Financial Issues Parents Wish They Had Been Aware of Before Sending Their 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.
Tuition Insurance: Research shows that more than half of parents are worried about the financial investment of college, even though more than a quarter of them have been saving for 10 years or longer to pay for that investment. According to a recent Liberty Mutual Insurance survey, parents are as stressed out saving for their child’s college education (45%) as they are saving for retirement (44%).
A Liberty Mutual survey also found that the vast majority of parents (86%) don’t know there is a way to provide you and your family with financial peace of mind. Liberty Mutual’s Tuition Insurance protects students in the event that an illness or an unexpected situation arises that forces them to withdraw from school. (1)
When we send our 18 year-olds off to college, we spend a lot of time figuring out where they should go and how we are going to pay for it, but we may never contemplate what will happen if our young adult is unable to complete the year, or the semester at school. Our family spent tremendous energy scoping out the appropriate colleges for our sons, but we neglected to spend even a single moment figuring out what would happen if it turned out that our student had to withdraw from school. In retrospect, we wish we had known that there was a way to protect our educational investment.
Your teen’s college may offer reimbursement in the event of withdrawal, but read the fine print about deadlines and withdrawal dates. For additional protection, explore what Liberty Mutual offers families. For instance, you can purchase Tuition Insurance for a whole year or per semester and you can choose to tailor your coverage to tuition plus room and board or just tuition.
The insurance must be purchased before the first day of school and provides reimbursement for unforeseen accidents or illnesses such as Mono, a bad flu, or a broken leg that needs surgery or mental health conditions. Please note that there are exclusions (2).
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. (3) Finally, if you bundle your home (including renter’s insurance) with auto insurance at Liberty Mutual and you can qualify for additional discounts.
Everyone Will Be OK. 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.
Some additional information:
(1) Parents need to know that they can protect their investment in undergraduate and graduate school easily and affordably. Tuition insurance is purchased before classes start. Many institutions offer limited or no reimbursement options after a certain date. Tuition insurance allows students and parents to customize their insurance coverage to pay for what they need. For example, parents can purchase insurance for a whole year or per semester and they can choose to tailor their coverage to tuition plus room and board or just tuition. Students who withdraw mid-term often do so during a time of crisis or emergency. It’s easy to sign up – Tuition insurance is sold through LibertyMutual.com where you can go online to get a quote by answering just a few short questions.
(2) Pre-existing physical and mental health conditions are covered provided the student has not received medical care or treatment, nor has experienced symptoms of the condition within 180 days prior to the purchase date, and during the period between the purchase date and the first day of classes of the covered term.
(3) 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