I admit the title is a little misleading and there is no way a 25k$ a year expense will save you money. Grocery cashiers always feed me a line that I saved 34$ today at check out. Silently I always think, “Funny, it feels like I just spent 90$.” If Kroger can force their cashiers to mislead me at every check out, then I can write an article using the same technique, and at least I only put twenties in the picture. College will be a huge expense, but there are some tax savings, some expenses included in cost of attendance, and some things you just don’t have to pay for anymore.
American Opportunity Tax Credit (AOTC)
The AOTC is the single best item on the list. There is a tax deduction that will give you a 2500$ tax break. Tax deductions are not created equal. For example, the mortgage interest deduction is deducted from your earnings, and you might just use the standard deduction anyway. Spending 2500$ on mortgage interest will not get you 2500$ in tax refund, but the AOTC is the best kind of deduction, because it is subtracted from your taxes owed.
It is tax code, so the IRS had to make it a little extra complicated. The credit is 100% back of the first 2000$ you spent, and only 25% of the next 2000$ you spent. There are some conditions, including a maximum income, and the student must be enrolled half time. The bottom line is for my family, spending 4000$ on college in 4 separate years will get me 4 separate 2500$ tax credits per child.
Money spent for “free” public school.
My situation will not be exactly like yours, but there is a lot of money going out at back to school time. As teachers, we get nickeled and dimed to death, at the end of the 2 month no paycheck drought. Our bill this year included out of district tuition, dual-enrollment fees, senior fees, computer fees, parking pass, PTA membership, booster club membership, lunch money, and tissues/markers that earn extra credit. Our out of district fee is reduced to 370$ because we teach in the district, but the total was still over 750$. The dual enrollment classes and tuition add up fast.
I know that soccer is specific to my family, but most families have big expenses for activities ranging from dance to taekwondo to baseball. Including travel soccer fees, high school soccer fees, uniforms, cleats, shin guards, and tournament fees, we put out a significant amount of cash. Tournament weekends get expensive quickly, considering hotels, gas, and extra meals in restaurants. I would estimate we spend around 2k$ on soccer for Jumpstart Jr. I haven’t even brought up fundraising.
There are plenty of people who want their car washed on Saturday morning, and that is a great fundraiser, but some of the fundraisers are absolutely horrible. No, I don’t want to pay 20$ for a 5$ box of cookie dough, so that the team can make 8$, and some fundraising company can make 7$. Can’t you just ask for donations, and I’ll make Jr. mow a lawn, and give you 25$. I will treasure the break from the guilt of sending the children, to family and neighbors, with the dreaded fundraiser forms.
I have made my kids pay for most of their tickets, but at Prom or Homecoming time, it is easy to feel
weak sympathetic watching them spend money for tickets, shoes, flowers, and dinner. Between Nanny, Mrs. Jumpstart, and I sneaking them a few bucks (without telling each other) they pull in some cash for dances. My kids attend football, basketball, and volleyball games, and they always charged admission, even in middle school and for JV games. When my kids played soccer and wrestled, they were not buying tickets, but the parents were. There are a lot of parents that show up with a few sibling and spend over 20 bucks to watch their own kid play JV soccer, or watch a couple of 6 minute wrestling matches.
Freshmen can’t have cars at some colleges, and at most colleges you don’t need car. Colleges are geographically compact, have strict parking rules and enforcement, and offer busses and shuttles. We visited Roanoke College this week, and they actually give out free taxi vouchers for off campus weekend transportation. Besides the importance of exercise, walking on a college campus is great. College campuses are typically beautiful, there are activities everywhere, and the people watching in incredible. Limiting miles put on the car can save a tremendous amount of gas money. There may be a way to downsize, get rid of an unnecessary car, and save even more.
We have been limiting restaurant expenses, but with 3 mouths instead of 4, restaurant bills will be reduced. Even at taco bell, when I
order ask politely for everybody to have beefy Frito burritos off the dollar menu, it still saves 2$. At most fast food places we’ll save 6$, and at nicer restaurants 12$. Our grocery bill will have some serious reductions as well. Between sliced on crackers, melted on chips/pasta, and grilled cheese sandwiches, my son eats approximately 27 pounds of cheese per week. When we cut back to 2 lbs., that’s 25 lbs. less cheese per week, and the cheese savings alone, have got to be thousands each year.
Adding it all up
I realize these savings will not even come close to negating the cost of college, but they are steps in the right direction. Some of these seem like illusions. Instead of paying high school fees, you are paying college fees, and instead of groceries you will buy a meal plan. The meal plan at college will be ridiculously expensive, and it is not cost effective, but remember room and board was included in the 25k$ a year for a public college. That cost of attendance number included fees, food, athletics, entertainment, water, electricity, etc. For my family items on this list will easily be over 5000$, and that feels slightly better.
Update from Nov of freshman year.
Monthly spending has dropped. Grocery bills are smaller. Water and electricity bills are smaller. We spend less on gasoline. No bills for sports, activities, or equipment. If it wasn’t for those pesky 8 grand bills twice per year.