College Savings: Money Tips for College Students and their Parents

Student loading up books, clothes, and other items purchased with college savings as they make their way to freshmen year

High School Seniors: Whether you are waiting to hear back from early decision entries or are still sending out applications, in less than a year, you’ll be arriving on campus for the first time. There’s a lot to plan for: class selection, dorm life needs, social clubs – and, of course, all of the particulars of student finances that will wear down your college savings. It’s an exciting time, but also pretty nerve-wracking! This article aims to leave you with a little less stress about your cash on campus. As you prepare for college, guest blogger Nichole Coyle, Certified Financial Planner™, has money tips to help you adjust to this new phase in life.


First, a Note for Parents on Student Finances & College Savings

One of the most powerful tools in college savings is time. The earlier you begin, the more you can take advantage of compounding interest and investment growth. Even small contributions made over many years can add up significantly. There are various college savings vehicles, such as 529 plans, Coverdell ESAs, and custodial accounts*. Each has its unique features, so it’s helpful to understand the benefits and limitations of these options. This can help you to choose what works best for your family’s goals.

Because time is so valuable, setting up automatic contributions to your child’s college savings account can be a wise choice. This makes saving easier and ensures that you consistently put money away for your child’s education. Most accounts allow for others (like family and close friends) to contribute to them as well. This can be a great option around holidays and birthdays for others to invest in your child’s education.

Additionally, encourage your child to excel academically and/or in extracurriculars and explore scholarship opportunities. Scholarships can significantly reduce the financial burden of college. Also, include your child in discussions about college savings. Teach them the importance of budgeting, financial responsibility, and understanding the value of education.


For Students

If the responsibility of paying for college is partially or fully on your shoulders, this will have a significant impact on your overall student finances. Here are some money tips to help.

Boost Student Finances with a Part Time Job. When it comes to on-campus employment, there are many positions available from working in the bookstore, at administrative jobs, as an aid, and so much more. On-campus jobs structure their work opportunities to be flexible around your class schedule.

Off-campus, there are plenty of part-time work opportunities, whether at a local retail store, serving or bartending at a local restaurant (after you are 21), an internship within your major, etc. Some local employers provide flexible hours for college students and will work around your class schedule. Finding a part-time job will provide spending money and the flexibility to save for or pay down some of your college tuition instead of taking out more loans.

Save Where You Can

There are lots of opportunities to save money and stretch your student finances while in college. One of the biggest ways to cut costs is to live at home if the option is available to you. You can also take online classes to save money on gas or other travel expenses. Pack a lunch and bring a refillable water bottle instead of buying food each day. Look into taking more than 12 credits in a semester (many universities offer several free credits after the first 12).


Extend Your Student Finances: Start Saving Early

Consider turning your current savings account into an emergency fund (or open a new account if you’d like to keep it separate) and start saving at least 10% of your paychecks into that account. An emergency fund can save you from having to use a high-interest credit card in the event of an unforeseen expense. In addition, consider opening a Roth IRA to jump-start your retirement savings*. Student finances can be thin, and it might seem a difficult prospect to set that money aside for the future, but compounding interest can have a remarkable effect when starting early and can help set you up for the future.


Continue Searching for Scholarships

Even after you have enrolled in college, you can still look for scholarship opportunities to help lighten the financial burden of tuition and/or books. You can search online and even ask your school’s financial aid department if they have any opportunities available.

Use Federal Student Aid Wisely You most likely filled out and utilized FAFSA already. Look over your financial aid options thoroughly before accepting your federal student loans. Consider how much you need for the semester, and don’t over-borrow because you will have to pay it back after graduating. If federal aid doesn’t cover your tuition, look into more student loan options at your school. Keep an eye out for the various pathways to federal student loan forgiveness and programs that make paying after graduation easier – these are longer-term solutions but can factor into your planning.


Spend Modestly

Remember that you will only be in your dorm or college apartment for a short period of time. You don’t need to buy everything brand new. Utilize thrift stores and other second-hand markets to purchase your essentials. There are plenty of DIY ways to upcycle items (and bonus, it’s good for the environment)!


Factor Entertainment into Your Student Finances

Look into free and inexpensive activities on campus. Check out local hiking trails, parks, bookstores, libraries, and other community organizations that offer free entertainment.


Needs vs. Wants

Finally, consider what you need versus what you want. Recording your student finances in a spreadsheet or other record will help you list all your expenses and note what is discretionary and what is required. You don’t have to get rid of spending on discretionary items altogether, but be aware of what those items are and consider the priority of that item versus saving the money for something else that may be more important.


As always, if you have questions or would like to discuss your unique situation, please don’t hesitate to contact me.

Nichole M. Coyle


20333 Emerald Pkwy

Cleveland, OH 44135

216.621.4644 x1607

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A Roth IRA offers tax free withdrawals on taxable contributions. To qualify for the tax-free and penalty-free withdrawal of earnings, a Roth IRA must be in place for at least five tax years, and the distribution must take place after age 59 1/2, or due to death, disability, or a first time home purchase (up to a $10,000 lifetime maximum). Depending on state law, Roth IRA distributions may be subject to state taxes.

Investors should consider the investment objectives, risks, charges, and expenses associated with municipal fund securities before investing. This information is found in the issuer’s official statement and should be read carefully before investing.

Investors should also consider whether the investor’s or beneficiary’s home state offers any state tax or other benefits available only from that state’s 529 plan. Any state-based benefit should be one of many appropriately weighed factors in making an investment decision. The investor should consult their financial or tax advisor before investment in any state’s 529 plan.