Money Saving Tips for Parents After the Kids Have Left for College
At a glance:
- Adjust food spending.
- Comparison shop for insurance.
- Decide who claims the dependent.
- Cut cable, internet, and entertainment.
- Make adult children more independent.
It’s no secret that raising children is expensive. And when you add in the continually growing cost of higher education, your financial landscape can feel downright overwhelming.
But take heart – you’ve accomplished so much in the last eighteen years. You’ve raised a child from infancy to adulthood, prepared them for life, and are now sending them to college where they will continue to learn, grow, and become a successful part of society.
Congratulations! It’s time to celebrate. But it’s also a great time to examine your budget and find ways to lower your expenses while your children are off at college. The obvious advice is to downsize your house and vehicles. But here’s some more advice to really lower those monthly expenses.
Eating In / Eating Out
One of the best places for anyone to start finding ways to save money and lower their cost-of-living expenses is to examine and adjust how much they spend on food – eating at home and eating out.
The same is even more true for parents whose kids have left for college.
Make an effort to reduce the amount of food you buy to stock your shelves and fridge at home. Remember, that ‘bottomless pit’ you called your teenager isn’t around to empty the cupboard anymore. If you buy less food, you’ll end up saving money up front and you’ll end up throwing less out.
Not only does having your child away at college mean that there’s one less entree to order at your favorite restaurant, but that’s one less person having input on ‘what’s for dinner’. Many families these days eat out because their kids have grown accustomed to it.
Ask yourself if you really need to go out to eat tonight.
Your child will need health insurance and, if they brought a vehicle to college, car insurance. The key phrase here is – comparison shop.
Sending your kids off to college is a great time to compare coverages of health insurance and car insurance, making sure that you’re getting the best price for you and your kids.
More than likely, your college student will stay on your health insurance while they remain a full-time student. But it wouldn’t hurt to check out any health coverage offered by the university.
And if your student isn’t taking a car to college, ask your insurance agent about a premium discount while they’re away from the steering wheel.
Lowering Your Taxes
Okay, so lowering your taxes isn’t exactly an active, everyday way to decrease your expenses. But, finding the best tools to get your taxes as low as possible can save you some big bucks each April.
First, you need to decide which will be more valuable – claiming your student as a dependent on your tax return or allowing them to file their own return. For example, your student may want to file on their own if they are expecting a few hundred dollars from the IRS. But as parents, you might be able to save a few thousand by claiming your child as a dependent.
Whatever strategy you choose, make sure you examine all of the available college tax credits and deductions that are made available to those seeking higher education.
Cable, Internet, and Entertainment
Do you watch as much television as your kids? Do you download as much music or as many movies from the internet? Are you playing online video games like your teenager?
If the answer is no, check out reducing the speed of your internet (internet providers love hiking up the price on faster connections), think about scaling back your cable or satellite TV channel lineup, and stop paying for online gaming while your kids are supposed to be earning a degree (yes parents, you don’t just buy a video game anymore, now they come with monthly costs too).
Saying ‘No’ to Adult Children
Let’s face it, most parents will always want to help out their children, no matter what their age or predicament. But there’s a fine line between helping your grown children and inviting them back into your home to continue raising them into their mid-to-late 20s or even 30s.
One of the best ways to reduce (or guard against potentially increasing) your expenses is to help your children understand that you’ll always be there for them, but that you expect them to begin living their lives as responsible, independent adults.