It’s difficult for parents to sit down with a calculator and come up with an accurate budget for a child’s college education. If you don’t think so, prepare a budget for your life for the next four years and see how accurate it is afterwards.
Most colleges will give you a good indication of what current costs will translate into a reasonable estimate for a semester, and you can adjust that for cost of living increases for four complete years.
That is a quick answer, but as you probably already know, higher education generally costs more than we expect because of all the flexible expenditures that are involved when a young adult stays away from home. If you are an accountant, you may have a much better handle on what to expect, but for most of us, it is at best an educated guess.
Take what you know as far as course of study, room and board, food, clothing, books, and tuition. Then add any relevant fees such as clubs, fraternities or sororities, and transportation. Add another 10% for all the contingencies you can’t foresee after you have included everything that can be a reasonable expense.
If your student is still in high school, add about 7% to the estimated semester cost for every year it will be before he or she starts to college. This is a good rule of thumb amount for the increase in cost of living.
Basing your estimate on a semester at a time, begin with your adjusted semester cost for only the first one, and add 5% to the total semester cost for the next one, and on to the next, building up so each one is more than the previous. Do this for the duration of the four years.
Fine Tuning the Overall Expense
Don’t let the total cost frighten you out of your wits. This should be a fair estimate of the worst case scenario if you didn’t attempt to find savings up front. When you seek financial aid or scholarships, you can trim the numbers down considerably on out of pocket costs.
When looking for cost savings for college, begin with scholarships and grants first. If you are to pursue this route, you must start your quest relatively early and at least by the beginning of the senior year of high school. If your child is not ready to commit to a course of study, there will be some avenues you may not be able to pursue, but most grants and scholarships are based on academic achievements more so than the major area of study.
Your child should be impressed with the importance of staying focused to get the best grades possible and improve the opportunities of college funding at the high school level.