Cutting out even a few expenses and redirecting that money to a college savings plan can add up to a significant college fund. Here are some expenses many families can minimize or eliminate altogether.
• Vacations
According to surveys by AAA, "Money Magazine” and Visa, the average American family spends $1,000 to $1600 on a vacation every year. Cut that cost dramatically by taking a cheap road trip or going camping. Or eliminate it altogether and find a creative way to enjoy a “staycation” at home together.
• Drive the family car for an extra two years.
If you’re in the fortunate position of being able to replace your family vehicle, hold onto your vehicle for another year or two and divert what would have been your car payment into a college savings plan. Reallocating a $250 monthly car payment would amount to $6000 over two years (more when the interest is added).
• Brown bag it.
According to the AARP’s website, you can save approximately $3.50 each workday by bringing a lunch instead of eating out.
• Make your own coffee.
If you buy $3.50 grande latte at Starbucks every morning before work, that’s almost $900 a year in foam. A one-pound bag of Starbucks Sumatra costs about $14 and brews 40 8-oz. cups of coffee. Brew your own java at home and you’ll save $15.75 per week in coffee expense. Do that every year your student is in high school and you’ll have saved over $3,000 to put towards college.
These savings add up. If a family followed those recommendations when their student started high school, they'd have saved about $15,000 by the time their student started college, even more (with less impact on their financial aid eligibility) if they'd been putting all that money in a 529 savings plan.
I know that recommending you save for college isn't revolutionary financial advice. But too many families arrive at the college admissions process wishing they'd saved more. If you'd like more advice, finaid.org has a wonderful section on saving for college.