You know all those times you fumed at the nickel-and-diming that takes place this time of year as your children head off to elementary or high school? Well, it’s nothing compared to the hundreds and sometimes thousands college kids have to spend before their school year is even past its first month.
And though you have to tell your 15-year-old that you can’t get that locker organizer just yet because you don’t get paid until next Friday, you can’t very well tell your university freshman you can’t afford that $100 course book until next week because next week may be too late for him to have it read.
There are ways to lessen the impact of those necessary purchases, though, and as with most financial matters, the answer is budgeting.
The base expenses of a college education (tuition, room and board) are natural bank-account killers because there’s no way around them. They have to be paid. The $1,500-$2,000 you paid 15 years ago on tuition has more than quadrupled since, with the average cost in Canada pegged at about $7,000 per semester. Multiply that by two for the full school year. Multiply by the number of years your child will be studying and factor in inflation and you can expect to pay anywhere from $30,000 to over $60,000— that’s possible your annual salary, and then there’s the cost of living away from home (which really is one of the important aspects of continuing education some parents have a hard time accepting), which can often eclipse the cost of tuition.
The ideal is for parents to start thinking about how to come up with that $120,000 as early in a child’s life as possible, and a Registered Education Savings Plan (RESP) is a great way to save while receiving some benefits from the federal government. New plans have no annual contribution limit but have a lifetime limit of $50,000 (plans opened prior to 2006 have a $4,000 annual cap and $42,000 lifetime cap). The government can contribute up to 20 percent on the first $2,500 annual contribution. More information is available athttp://www.canlearn.ca/eng/savings/know_your_resp.shtml and many financial institutions have online RESP calculators to help you maximize your contributions.
And of course, don’t neglect the cost of transportation. Many institutions include transit passes as part of the school ID cost but some don’t, so be prepared to pay for monthly passes if your student lives off campus or needs to commute to a part-time job to supplement his education costs. A car may be a cheaper alternative over the course of obtaining a degree, but there’s the initial outlay and gasoline and maintenance costs along the way.
The cost of course books is outlandish, but many courses use the same reading list year after year. As such, it may be beneficial to foresake new books and buy used. Further cost savings can be realized by reselling them after they are no longer needed. Institutions have used book stores and as with much buying and selling, Kijiji and Craigslist offer a chance to buy and sell course books, but the big chains such as Amazon and Chapters also have used textbook categories at substantial discounts over new.
Getting an education may be expensive for both the child and the parents, but some financial planning can take the anxiety out of the experience.