Budgeting for education: Avoid price-shock by planning ahead for the costs of school

School is open and that means so are parents’ wallets.

The excitement of a new school year can be blunted by the costs of school supplies, lunch money, new clothes, and activity fees. All of that is doubly stressful if mom and dad are also worried about how to pay for college.

The stress doesn’t need to be overwhelming. Financial planners offer some tips on how to pay for the costs of school.

Make a budget

This is the first and most basic thing every parent needs to do, according to Tom Zordani, president and founder of Faith Finances, a Catholic-based financial program.

Budgets take time, and they need to be a concrete thing, not an abstract idea. Gather your bills, look at pay stubs, consider average monthly expenses. Put your budget down on paper. Whether it’s written on a legal pad or done on a computer, it needs to be a hard copy.

A written budget provides a thorough look at exactly how much money you have and what needs to be done with it.

“When you look at it, God gives you money for your benefit, and there are only three things you can do with it — spend, save and invest, and give it away,” Zordani said. “God wants us to do all things in balance, and a budget helps you allocate proper spending, saving and giving. Once you do that your life will be a lot more blessed.”

Budgeting has three basic rules, Zordani said. Never spend money that is not allocated in the budget, never spend more than you make and don’t go into a new month without your written budget. Know in advance if possible if extra money is going to be needed for a specific activity or need that month, and reallocate funds if needed.

Shop around for deals

Read newspaper circulars and online ads for deals on school supplies, cut coupons and consider consignment or thrift stores for some school clothes and other needs. Zordani encourages checking dollar and discount stores for deals on supplies. Take advantage of any sales or discounts available for school uniforms.

Be willing to cut corners

If an unexpected expense or fee comes up, realize that means that money might have to come from cutting back on something else. Cut out a couple meals at restaurants, trim back the cable TV or switch to a cheaper cell phone plan. Not everybody will be happy making sacrifices, but it has to be done to avoid spending money that you don’t have.

Save a little each month

“Saving for college and getting results is just like saving for anything else you want, like buying a car or a house,” said Greg Putnam, a financial analyst and lecturer at the University of South Carolina’s Moore School of Business. “The same principles apply — put something aside every single month to reach your goal.”

Putnam said even $25 or $50 a month is good for a start.

Another good option is to set up a 529 plan as early as possible. This is a special investment account designed for educational savings. Money that goes into it over the years can be taken out tax-free when it comes time to pay for education at two- and four-year public and private colleges, universities and many technical schools.

Do your research and consider all options

While many kids might harbor plans of going away to school, consider in-state schools first because in the long run, they are often the most cost effective.

Zordani encourages parents to realize that not every student is suited for a traditional four-year college. If a child is interested in a trade or program that can be fulfilled at a community college or technical school, go that route. Many students also can complete the first two years of basic college requirements at tech schools and then transfer to a four-year college or university to complete their degrees.

Putnam stresses it is important for students to do their part by getting the best grades possible, participating in sports and activities when possible and learning about available scholarships and grants that can help with college costs.

Ask for discounts or set up payment plans

It never hurts to ask, Zordani said. Even if they say no, at least you tried, and sometimes you’ll find people willing to knock a few dollars off the price for someone in need.

If there are unexpected school fees or expenses that don’t fit into your budget, ask teachers or administrators if there is a way to pay in increments.