How To Build Your College Budget

Your college budget can be made up of many layers. If you shop for the right schools with your budget in mind, you are more likely to end up with an affordable college degree. When building your budget, you’ll add together the following components, modified to your liking, of course.


  1. Savings - Money that parents, student, grandparents, and anyone else has saved specifically to pay for college plus any extra savings that aren’t needed to meet other financial goals.

  2. Cash flow - Money that you are accustomed to saving for college or will no longer need for other purposes like groceries for the student, extracurricular activities, etc.

  3. Earnings - Money that the student is able to earn while in college to help pay some of their expenses.

  4. Tax Credits - This could be from the AOTC or LLC. Only count this as a source for college if you plan to proactively put the money saved in a separate account to be used solely for college expenses. Income limits and other requirements apply.

  5. Student Loans - The amount that your student is comfortable with paying back in student loan payments once school is over. This amount should not hinder the student from reaching other financial goals.

  6. Private Scholarships - The amount the student realistically can win and will dedicate themselves toward winning in private scholarships over all four years of college. While it is impossible to accurately predict this amount, you should consider how eager the student is to go to a chosen school, how motivated they are to accomplish goals in general, and how much time they’ll likely have to work on finding and applying for scholarships.


These sources added together give you your budget for all four years of college. When shopping for colleges, any school that will likely cost your student more than this total should be considered off the table UNLESS you can put together some other reasonable plan to pay for the school. Students who really want to go to a specific school may be willing to make sacrifices and/or get creative to make it happen. Just be sure that the student fully understands the sacrifice they are signing up for!


Need help calculating your school budget? Get In Touch! Rynda@21finance.xyz