(Newswire.net — July 23, 2018) — It’s time for college students to start preparing to head back to campus after taking the summer off. That means their parents are likely preparing as well.
There are a lot of logistics to think about, and many of them can revolve around helping students learn how to budget while they’re in school. This is important as news was recently released on CNBC stating that 1 in 3 parents will help their kids pay off student loans. One-third of surveyed parents say they will be helping their student pay back a portion or all of their student loans. The research was conducted by College Ave Student Loans.
This comes as student loan debt in the U.S. alone has soared to $1.5 trillion.
What all this means is that parents need to work with their students to help them budget and prepare to head back to school in a fiscally responsible way, to minimize the amount of money they end up borrowing. Teaching them these lessons now can also help prepare students to make better financial decisions after graduation, allowing them to pay off loans more quickly.
The following are some financial considerations parents and their college student should think about this fall.
Minimize Spending on Food and Entertainment
A lot of college students will spend a big chunk of their budget or even take extra money from student loans to pay for food and entertainment. Encourage them to be cognizant of this spending, and find smarter ways to save money on these costs.
For example, encourage them to browse coupon and deal sites such as Swiggy offers on food. These are small changes that can go a long way to helping students spend less when they return to campus.
Track Spending
For college students experiencing their first taste of freedom, it can be tough even to see exactly how much they’re spending or how much taking extra on those student loans is ultimately going to cost them.
Encourage your student to use a budgeting or financial tracking app that will give them a clearer picture of where their money is going, and how that could potentially affect them in future and following graduation.
Start Paying Loans Early
This may be the year that you work with your college student to help them find ways to start paying off their student loans while they’re still in school. Even if they’re just paying the interest on these loans, it’s going to save your student, as well as you, money in the long-term.
Rather than focusing on maxing out the amount they’re eligible to borrow, encourage your student to start cutting down on that debt as soon as possible.
Save on Housing
Finally, there are different options that you might explore to help your child save on the cost of housing while they’re at college. The best option whenever possible is to live at home, but this isn’t always an option. If that’s not a choice, becoming a Resident Assistant (RA) often means that the student gets room and board for free.
Another option is to skip the expensive dorm and instead live off campus and share the rent with several roommates.