Budgeting For College: What You Should (Really) Expect To Pay
One of the biggest mistakes students make when preparing for school is not looking at the total cost of their degree. We don’t just mean the “cost of attendance” you see on your school’s website – that will show the tuition, fees, housing, and a few other expenses. But what it doesn’t show is a progression for the entire degree – you don’t see the price increases every year in tuition, housing, and fees. You also don’t see the (typically 1-year) community-based scholarships you receive as a senior in high school disappearing your sophomore through senior years. It’s best to have a 2-year or 4-year plan (depending on degree) so that you can really know what to expect.
When putting together a budget for school, consider expenses such as:
1 | Tuition & Fees
Use your school’s listed tuition & fees for Year 1, but add 3% each year. For instance, if tuition is $30,000 your freshman year, assume it will be $30,900 your sophomore year, $31,827 your junior year, and $32,782 your senior year. Your actual increase may be more or less, but it’s better to plan for something than to not be prepared at all.
2 | Room & Board
The on-campus rates will be published by your school, but if you plan to live off-campus you should do your research and estimate a full year of housing. Sometimes schools will list estimates for off-campus housing. These numbers are usually realistic for undergrads. If you’re a grad student, though, consider whether it’s enough money or if they’re basing their estimates on concessions you don’t plan to make (i.e. having a roommate, living in a studio, or living somewhere without basic amenities). You might need to adjust the numbers depending on the lifestyle you expect to have in school.
*Suggestion: Be honest with yourself. You don’t want to plan for a roommate and then realize once you start school that you just can’t do it. It’s better to estimate on the high end and then adjust down if you can.
You should also budget for an annual increase in housing costs.
3 | Health Insurance
Your school will list health insurance in the cost of attendance. Assume a 3% increase every year.
4 | Incidentals
You still have to live. Estimate what you spend now on incidentals like car insurance and gas, eating out, dry cleaning, and other expenses. You’ll need to network while you’re in school, and that typically costs money, so estimating low (or not including this in the budget at all) could be a huge mistake.
5 | Books and Supplies
Consider how much you will need to spend on books and supplies each year. Some majors will cost more than others (i.e. if you’re an art major and having to pay for supplies, or an economics major and your textbooks are more expensive).
**NOTE: This is one of those areas where you should be careful about cutting costs. It’s great to find discounted textbooks online or to buy digital copies of books to save money. But make sure it’s not at the expensive of your learning experience. Not all “old editions” are a good idea, and sometimes international versions of textbooks aren’t either. Digital versions of textbooks could also inhibit your ability to absorb information. You also don’t want to buy used workbooks with answers already written in them. The last thing you want to do is save money on textbooks but then lose a scholarship because your grades suffer.
6 | Conferences
Networking is important, and it won’t just happen on campus. Students should check to see what conferences are offered in their concentration, and budget to attend the important ones every year. This includes hotel, airfare, and conference registration.
7 | Travel
This is one of those expenses that’s usually not budgeted for. In college, you’re going to go home (or somewhere) for Thanksgiving, Winter Break, Spring Break, and the summer. You’re going to meet friends from around the world, and you might want to go visit them on breaks (because: free housing). You also might want to study abroad (or take trips that are in the US, but that still costs money). Make sure you include money in your budget for travel every year, with at the very least a round trip flight home for the winter break and another round trip flight for your summer internship. And keep in mind that travel is important – sometimes bonding away from school with friends can make the difference when trying to land a coveted internship or job, and you never know who they can introduce you to when you’re away from campus.
8 | Capital Expenditures
This category covers important one-time purchases, such as a new laptop and printer, or a couple of interview suits.
9 | Moving
If you live on campus, you’ll more than likely need to move out at the end of the academic year and will need to cover the cost of storage during the summer. U-Hauls, boxes, movers, monthly storage units – these costs add up. Repeat twice each year, once for move-in and once for move-out (unless you live off-campus and have summer internships in the area). You should also include dorm room/new apartment expenses for the first move.
Once you have your estimated expenses written down for each year of your degree, you’ll have a better picture of what it really costs for school. In the next article, we’ll address where the money comes from to pay for all of these expenses. Yes, college is expensive, but there are ways to cut down on costs that don’t jeopardize the experience.