Financial Tips for Older College Students
Many young adults get sidetracked from obtaining a higher education as their lives unpredictably unfold. Kids, travel, work and family can all push off college plans. Yet later in life, many adults find that getting the degree can pay off big time.
According to the U.S. Census Bureau, the expected lifetime earnings of an individual who only has a high school degree is $1.2 million. Those who have a bachelor’s degree are expected to earn about $2.1 million, and those who obtain master’s degrees are expected to earn $2.5 million.
Regardless of your age, college can be expensive. And older students need to take expenses into account that weren’t major factors when they were 18 or 19 years old. If you’re considering college later in life, here are five tips to help you stay on budget while balancing life and educational costs:
- Childcare – Do you have young children? You may need to budget for childcare. In addition to classroom time, a babysitter can be needed when you meet with other students for a school project or when doing homework on the weekends. To ease the financial burden, check with your school to see if childcare is offered and consider trading childcare services with another parent in a similar situation so you each have time to study.
- House Maintenance – Extensive school work can take you away from house chores and yard work. Many adult students find it easier to hire a cleaning or lawn maintenance service, yet the cost could set you back considerably each month. Consider doling out more chores to family members or enlisting the help of close friends.
- Healthcare – If you are leaving your job to return to school or switching to a part-time position, you may lose healthcare benefits. This becomes a greater issue if your spouse and/or children are attached to your health insurance. Research your company’s COBRA plan to see if you can continue your current benefits. If you need to enroll in an individual health plan, consider a higher deductible to keep monthly payments as low as possible. Additionally, make an effort to prevent future health problems. Be sure to exercise regularly and eat healthy, balanced meals.
- Retirement – In addition to healthcare benefits, adults who leave full-time positions may also need to scale back their retirement savings. Automatic contributions to a 401(k) or Roth IRA may cease or need to be reduced in order to meet other school-related expenses. If you have been counting on a specific retirement date, does this force you to delay your plans? Do you have other investments to pad the loss? Will your increased earnings potential make up the difference? If you must put retirement savings on hold, ask parents and friends who regularly give you gifts on birthdays and holidays to consider cash gifts you can deposit into your retirement account. If you get a tax refund, you can allot that funding to your retirement as well. Every little bit helps.
- Transportation – Many adults who return to school do not live near the campus. Gas, parking and/or public transportation must be taken into account. For those who own older vehicles especially, the extended commute may increase general wear and tear, requiring increased maintenance costs. Consider carpooling or enrolling in online courses to offset this expense.