What we'll cover
The costs of college living
Some general expenses to consider
Ways to save for higher education
Whether you're creating a savings plan for your child's college costs or your own, it can be easy to overlook some of the expenses of higher education that go beyond tuition.
Having the total cost of four-years of tuition in mind is a good starting point for determining your overall savings goal, but it's just one aspect of college spending. Here are some of the other potential expenses you could encounter.
Room and board expenses
Many four-year schools require students to live in campus housing for their first year, which costs around $12,000 on average. If off-campus living is allowed, you could consider renting or cost-saving options, including living with roommates or with family.
Location can also affect access to a meal plan or grocery store, so be sure to factor that in to the overall cost.
Learn more: Should you store your college savings in a money market account or a savings account?
Transportation costs
Your child may have to deal with transportation costs to and from campus (and, if they drive, car insurance). You might also need to factor plane or train tickets into your savings plan if the school is a long distance from home.
Even if they're living on or near campus, your child will likely encounter situations where they need to get around town. With the rising costs of rideshare services, your bank account will thank you for planning ahead on how they'll get from point A to point B. Consider biking, public transit, carpooling or walking for budget-friendly options.
Don't forget about fees for applications, first-year orientation and graduation.
Books, laptops and tech
The sticker shock of required textbooks is a common experience for new college students. Luckily, there are a few options to get books more affordably:
Confirm with professors which textbooks are required
Rent or purchase books from an online retailer
Buy used books — or swap with friends
Search for e-books or digital scans
Re-sell books at the end of the semester to earn back cash
You'll also want to make sure your child has the technology they need for class. If they don't have access to a reliable laptop, tablet or computer, finding one refurbished or second hand could cut the price by up to 50%.
Keep in mind: It can be worth checking the school's website for student discounts on software or equipment required by the major.
Health insurance and medical expenses
Many colleges and universities require students to have health insurance coverage — and each has different requirements. If you or your child doesn't already have coverage, you may need to pay some hefty costs to enroll: Campus student health insurance policies can range in cost from $2,000 to $4,000 per school year. It's best to get ahead of any surprise charges by checking a school's website for their health coverage requirements, then researching what options are best.
Personal expenses
Think about current day-to-day expenses and consider how they might change after starting school. Some extra costs could include:
Furniture for the living space
Laundry (and clothing)
Separate streaming services
All of these factors will affect spending, and little changes can add up quickly. Making a plan for these lifestyle changes ahead of time and budgeting accordingly can help you make sure your money is going where it matters most.
Miscellaneous fees
As a final consideration, don't forget about fees for applications, first-year orientation and graduation. Keep in mind, there also may be fees for social groups like sororities, fraternities, excursions or clubs. While all of these costs may seem small on their own, they can add up quickly.
Saving for student life
Now it's time to consider the best way to save. A money market account could provide flexibility in the years between now and when your child is heading off to school. A high-yield savings account can be another useful tool for making the most of your money. With an Ally Bank Savings Account, you can make use of features like buckets to organize your savings for different college expenses.
It doesn't need to be overwhelming to plan for college life. Remember that by starting a savings plan, you're doing what you can to set your child (or yourself) up for financial and academic success.
