Costs that can go down when your child goes off to college

Your child is going off to college next year and you are starting to look at budgeting and how much it is going to cost your family to pay for tuition either through payment plans, loans or savings. But one thing families should consider when looking at their budget is expenses that may be lower when their child goes off to college and other savings.  Here are a few to consider:

Food: Parents often are in shock when they the room and board costs at their child’s chosen school but think about how much you spend feeding and housing them? I have a child going off to college in the near future and at least $500 of our monthly food shopping budget goes toward him. The months he is at college our monthly food shopping budget should be a lot lower so I’ll allocate that $500 a month toward his room and board costs.

Sports/Clubs:  I have a child that plays soccer and basketball and plays club and travel teams for both sports. Between the club/travel fees and summer camps we spend several thousand dollars a year on those activities. My child doesn’t plan on playing sports in college so it is really just because she enjoys and wants to play in high school so when she goes off to college I’ll plan on diverting those funds toward her college bills.

Car insurance:  When your child goes off to college check with your insurance agent to see if your insurer offers an “Away at School” discount for your policy. Most insurers require that the student attend a college that is at least 100 miles away from home and that they do not bring a car to school. It’s not usually a huge discount but can save you a few hundred dollars on your policy. You don’t want to take the student off of your policy but looking into this college discount could be worth your while.

Tax Credits:  Tax credits are a dollar for dollar reduction in what you owe the IRS in taxes. Check with your tax preparer if your family is eligible for the American Opportunity Tax Credit or the Lifetime Learning Credit. The American Opportunity Tax Credit for example has a maximum benefit of up to $2500 per year for those that qualify. There are income phaseouts and certain restrictions but these tax credits can be a great benefit to many families at tax time.