In Focus – SCCCU Blog

College is expensive. We all know that, but what often gets lost in the planning is the basic financial literacy our kids need before they ever set foot on campus. Think of this as your crash course on what to teach them — and how to prepare them to manage money responsibly from the moment they pick up their student ID.

Start With the Big Picture: What College Really Costs
According to The College Board, tuition at public four-year schools is $11,610 per year for in-state students and $30,780 for out-of-state students. At private colleges, it jumps to $43,350 per year — and that’s just tuition. The Center for Education Statistics estimates the full average cost of attendance (including room and board) to be around $153,000 over four years. It’s a significant number, but breaking it down helps it feel manageable.

Encourage your child to understand that college costs don’t stop at tuition — there’s housing, food, books, tech, travel, clothes, and the occasional late-night pizza. Learning to budget effectively at college means understanding the total cost of college life and tracking spending across categories.

Understanding Loans — And What Repayment Really Looks Like
Student loans can make college possible — but they can also create a burden that lingers long after graduation. Before your child takes out a single dollar, make sure they understand exactly what they’re signing up for.

Walk them through what repayment will look like when they graduate. For example, if they borrow $27,000 (roughly the federal loan limit for undergraduates), this could result in monthly payments of around $300 for 10 years. That’s real money, especially for someone just starting in their career. The best rule of thumb is to borrow no more than you expect to earn in your first year’s salary out of college.
Additionally, discuss the purpose of the loans. It can be tempting to take out extra money to fund things like a deluxe dorm or a top-of-the-line meal plan, but that borrowed money isn’t free. It’s accruing interest and will eventually need to be repaid out of their future income.

Encourage your student to view loans as a tool to cover essential expenses, such as tuition, required fees, or basic living costs. Everything else — from new headphones to Friday night sushi — should ideally be covered by part-time work, savings, or smart budgeting. The less they borrow now, the more options they’ll have later. And that can make all the difference when they’re trying to build a life after college without student debt weighing them down.

Budgeting Basics: Needs vs. Wants
Before they ever pull on their first college hoodie, your child should be comfortable creating a basic budget that prioritizes needs (like food and transportation) over wants (like concert tickets and takeout). If they haven’t already, they’ll need to learn about trade-offs and decision-making. You should make sure they can:

• Understand the amount they’re working with
• Use a spreadsheet or a budgeting app to track expenses
• Set spending limits by category
• Plan for irregular expenses (like buying books at the beginning of each semester

Explain that a budget isn’t meant to be restrictive — it’s meant to be a tool to give them freedom to spend without guilt or surprises.

Using Credit and Debit (Maybe for the First Time!)
Has your child used a credit or debit card before? Many college students open their first bank account and begin using a debit card independently. Help your child understand how checking accounts work, especially the importance of not spending more than they have. Show them how to check their balance regularly, set up alerts, and avoid overdraft fees that can pile up quickly with just a few small transactions.

Likewise, a credit card can be a helpful tool to have on campus (one that helps you earn air miles for a future trip home) — or it can be a dangerous trap. Whenever your child gets their first credit card, walk them through how interest works, what a statement balance is, and how to pay off their card(s) in full each month. Emphasize that just because you have a credit limit doesn’t mean you should spend up to it.

Manage Peer Pressure and “Fun” Money
College social life can be expensive — from football tickets to nights out and spring break trips. Your student will be surrounded by people spending money in ways that might not be realistic for your family. Help them plan for the fun stuff, but also talk openly and honestly about saying no, setting boundaries, and not going broke trying to keep up with friends.

As part of this conversation, talk to your child about what to do if they overspend — should they call you? Dip into their savings? Get a job or pick up an extra shift at work? The goal isn’t to shame them, but to prepare them with a plan for how to handle shortfalls.

The Bottom Line
Helping your child prep for college financially is about so much more than just tuition payments — it’s about building positive money habits that will serve them well for life. Invite them into the planning and budgeting process early on so they can learn to make confident, informed financial choices right alongside their most treasured teacher in life — you!