Offering advice on setting a college budget is simple. However, creating a realistic budget that covers more than just tuition and fees is a different challenge. One often overlooked aspect is the everyday hidden costs. If you're moving out for the first time this year, you might be unaware of the daily expenses you'll face.
Budgeting for College
According to a recent College Ave survey, around 66% of college students found their expenses to be higher than anticipated, with a surprising 26% underestimating costs by about $10,000.
This year, budgeting is particularly challenging. You might still be awaiting financial aid packages from some or all of your colleges, complicating cost estimations. However, there are several strategies to help you identify your college expenses and compile a list of daily costs, enabling you to create a robust budget.
Use Tools to Determine College Costs Estimates
Several tools can help you estimate the costs of college, one of which is the U.S. Department of Education’s College Scorecard. This resource allows you to review the average annual cost of any college you are considering. The Scorecard includes expenses for tuition, living, books, supplies, and fees, minus the average grants and scholarships received by students who previously received financial aid. Additionally, it allows you to review average annual costs by family income levels, providing a more tailored estimate. While these figures are averages and may vary, they offer valuable guidance in understanding potential expenses.
If you want an even more extensive breakdown of what student’s received in past years, you can use the U.S. Department of Education’s College Navigator. This information may be very similar to the College Scorecard, but can provide some detail on types of aid provided to students in the past several years.
Additionally, you should visit your college’s financial aid website. If they offer federal student aid, you’ll find a net price calculator available. This tool may require you to provide detailed information about yourself, your parents (if applicable), and your income and assets. While it’s not as comprehensive as the FAFSA, it will still ask for financial details about you and, if necessary, your parents. Completing the net price calculator on your school’s website can provide valuable insight into your expected costs. The net price is the total cost of attending a school minus any grants and scholarships you receive.
Understanding the Hidden Costs of College
Your school’s determined cost of attendance (COA) is used to help you estimate your costs for the upcoming year or term. The cost of attendance includes:
- Tuition and fees
- Books, course material, supplies, and equipment
- Cost of housing and food (living expenses)
- Transportation expenses
- Loans fees for federal student loans
- Miscellaneous expenses, including reasonable amount for documented cost of a personal computer
- Allowance for childcare or dependent care
- Costs related to a disability
- Costs of obtaining a license, certification, or a first professional credential
- Reasonable costs for eligible study abroad programs
The school determines your cost of attendance by creating reasonable estimates for each of the elements included in the cost of attendance.
What are the Hidden Costs of College
The hidden costs of college can include several different types of expenses.
Books and Class Materials
Although your school may provide estimates, you might find yourself seeking the best ways to manage expenses beyond tuition. Here are several strategies to help reduce the costs of books and other materials:
- Explore Electronic Options: Consider purchasing or renting electronic versions of your textbooks. These options are often available through your school or from external retailers like Amazon and Google Play Books. If you prefer digital access, this could be a convenient choice.
- Borrow from Others: You can borrow textbooks or materials from friends or classmates. Additionally, check if these resources are available at your school’s library.
- Buy Used Textbooks: If you decide to purchase a textbook, look into the cost of used ones. Whether you buy new or used, you may have the opportunity to sell the textbook back to your school’s bookstore later.
By employing these methods, you can effectively manage and reduce the costs associated with your educational materials.
Travel and Transportation Costs
Transportation costs are included in your school's COA. However, these estimates may not fully cover your travel needs. If you're attending school out of state, ensure you have funds for trips home during school breaks, especially when dorms or housing are closed. While traveling home for holidays or long weekends may not always be feasible, budgeting for some travel is wise.
To reduce costs, plan ahead and set alerts for flight deals. If you have a family member who travels frequently, they might offer you travel points to offset some expenses.
Beyond major flights, consider additional transportation costs. Do you live off-campus and need regular transport to and from school? Do you have an off-campus job requiring transportation? Reviewing all your options is essential. While having a car might seem convenient, it can be costly due to payments, insurance, gas, repairs, and parking fees. In cities, public transit may be a more affordable option, often with student discounts available.
By planning and considering all transportation methods, you can better manage your travel expenses and ensure you have the necessary funds throughout the school year.
Food Expenses
Food expenses are included in your school’s COA, but these estimates may not align perfectly with your lifestyle. Managing food costs can be tricky—you need to eat, but it’s possible to balance being budget-conscious with occasional splurges. However, frequent indulgences can quickly add up. While an occasional coffee might fit within your budget, buying multiple meals out each day can lead to an expensive habit.
If your school offers a meal plan, it could be a convenient way to ensure you always have access to food. Yet, paying for a meal plan that you seldom use can be a waste of money. If your housing includes a stove, oven, or microwave, you have the opportunity to prepare meals at home. By budgeting for groceries and making your own meals and snacks, you can significantly reduce your food expenses.
College Activities
Participation in Greek life, sports, music, art, and other activities can incur additional expenses during your college experience. For instance, Greek life typically requires dues ranging from $500 to $7,000 per semester. These dues are just the beginning; if your sorority or fraternity hosts events, there may be extra costs associated with those activities.
Similarly, other extracurriculars, clubs, and campus organizations may come with their own expenses. Playing a club sport might require you to purchase all necessary gear and equipment. If you join a musical ensemble, you may need to sell or buy a specific number of tickets for events. While engaging in campus activities can greatly expand your personal network, it’s important to consider the potential financial commitments involved.
Everyday Life Costs
There are everyday expenses you might not be considering, especially if this is your first time living away from home. While you might move into your dorm with clean clothes, toiletries, and some cleaning supplies, have you thought about what happens when those run out? Many dorms offer on-site laundry facilities, but they often charge per wash and dry cycle. And when you need to replenish your toiletries, are you aware of their costs? Do you know how much laundry detergent costs? These everyday expenses can quickly add up.
To effectively budget for these costs, consider talking to your parents for advice. Alternatively, take a stroll around your grocery store and note the prices of essential items. Remember, these products will be part of your grocery bill along with your food.
Emergency Expenses
Maintaining a rainy-day fund is essential. This fund can cover unexpected healthcare costs, emergency travel, or any other unforeseen expenses. Emergencies are unpredictable, and lacking financial preparation can add significant stress to an already challenging situation.
Everyday Expenses Can Add Up
The list above highlights only a few considerations for college costs, but there may be additional expenses unique to your situation. To identify hidden costs, keep track of your regular purchases or those of your parents. It might also be beneficial to talk with a friend who has already completed a year of college. Ask them about their daily expenses and any unexpected costs they encountered. This insight can help you create a comprehensive budget for the upcoming year.