Guest Post: Budgeting for the College Years

By: Lisa Dalton, California parent of a senior at the University of Oregon, and sophomore at Washington State University


With two kids in college, both at out of state universities, friends and neighbors ask all the time, “How do you do it?”  The answer is planning, financial education, and sometimes hard choices.

We began our college expense planning when our children were born.  We established college education accounts for each; and gifts, birthday money, and regular contributions were all a part of the savings plan. Our goal was to try to save half of the amount they would need for four years in college.  Of course, the economic downturn did not aid our cause, but it also did not deter our plan.  Many families feel that saving for college will hurt their chances for financial aid, but financial aid is primarily based on the actual income in a given year, rather than the value of your home, your retirement account or amount in your savings account in most cases.  Only 5.64% of parents’ regular savings is targeted to be spent on college expenses. (O’Shaughnessy 2012)  On the other hand 20% is assessed from a student’s savings so it’s smart to have students spend their money first, and accept any gifts of money from friends and family after the financial aid calculations (usually early January) have been made. (O’Shaughnessy 2012)   Every family should file the FAFSA (Free Application for Federal Student Aid) form each school year, whether they are of low, middle or high income, as circumstances change.  Plus, every school has a different financial aid policy and many scholarships require the FAFSA to be filed for the student to be eligible.  [Editor’s Note: Colleges determine financial aid annually, so changes in income and asset value from year to year can change financial aid awards.] We did some research on paying college expenses and the best resource we have found on understanding financial aid, and financial planning is:  Shrinking the Cost of College Workbook by Lynn O’Shaughnessy .

Our sophomore student was eligible for WUE (Western Undergraduate Exchange) scholarships at a wide variety of colleges in the western states.  (If you’re not familiar, check out for the list of states, colleges and majors that are eligible.) Although you’re paying 150% of tuition, as an out of state student there are many upsides, such as widening your geographical base, often less expensive housing costs, and the ability to take a full load of courses which is becoming more limited in California.  Our senior student will be able to finish with two bachelor’s degrees in just three years and one quarter through excellent access to courses and the ability to receive credit for all his AP (Advanced Placement) exams he in took in high school.

If you haven’t been able to save for college, it’s never too late. And there are plenty of ways you can build your savings (or reduce your spending) while your student is going to college.   Sometimes it’s just making choices (even though sometimes they are tough choices.)  It’s a great skill to instill in your student for the future of their financial independence.

Here are few ideas:

Books – Books are an expensive part of going to college, sometimes more than $1000.00 a year depending on the number of classes, and type of classes your student is taking.  But your student doesn’t have to pay full price.  There are used books available either at the campus bookstore, or through  Students can get e-books through Amazon or Barnes & Noble and other retailers.  My students have found renting books to be very economical for the large textbooks that they will probably never refer to again, when the class is completed.  Often, their on campus bookstore will rent them or they can check out a variety of retailers, like

Transportation– Having a car at college can be an expensive endeavor.  Parking fees (and often the inability to find it near campus or apartment), registration and continued insurance costs are costs that may be removed or reduced if your student chooses walking, biking or the public bus system (often free with college enrollment), rather than bringing a car.  Students who relocate far from home and are no longer using the family car can often still be covered on the family insurance policy, if they occasionally drive, but don’t have direct access to a car, and at a much reduced rate.

Furnishing their apartment – It’s an exciting undertaking to move into your first apartment and make it your own, but you can do it on a budget.  Look to garage sales, thrift stores and hand-me-downs from friends and family to furnish the place.  Keep in mind that college students tend to move a lot and they don’t always feel that personal attachment to items that you may have in your older years.

Prior to leaving for college, starting in the early high school years we talked with our children about taking part in their college education both by focusing on reaching their academic goals, but also by being a financial part of it.  Each year, our children have had to take on more and more cost of their education experience, from being responsible for their “fun money” to setting up utilities and paying for those expenses.  We feel that each step makes them more independent, while furthering their understanding of budgeting and the choices that we make.  There are plenty of different ways to pay for college, but the most important aspect is creating a plan and making it work for your family.


O’Shaughnessy, L. (2012). Shrinking the Cost of College.  New Jersey: F.T. Press.
Lisa’s other parent to parent advice: