September is College Savings Month, making it a good time for Maryland families to check in on their plans for future college costs. Whether college is a few years away or just around the corner, parents and teens can both play a role in getting financially prepared.
And preparing doesn’t mean you need to have every dollar saved before move-in day. Savings are one part of the picture. Scholarships and financial aid can help offset costs, while a realistic budget can help your family plan for what’s left.
The important thing is finding an approach that works for your family and starting where you can. Here are six ways parents and teens can prepare for college costs together.
1. Make the most of your Maryland 529 plan
If you’ve been saving for your teen’s education through a Maryland 529 plan, take some time to understand how you can use those funds before college bills start arriving. In general, you can use 529 savings for qualified education expenses at eligible schools, but it’s important to understand the rules before taking money out.
- Check which college expenses qualify before making a withdrawal.
- Keep receipts and records for qualified purchases.
- Plan your withdrawals around when you pay eligible college expenses.
- Consider how scholarships, financial aid, and other education benefits fit into your overall plan.
If you use 529 funds for an expense that doesn’t qualify, the earnings portion of the withdrawal may be subject to taxes and a federal penalty.
Still building your college savings? Learn more about 529 plans and other ways to pay for college.
2. Start your scholarship search early
Scholarships can reduce how much your family needs to cover through savings, income, or borrowing. And don’t overlook smaller awards. A few smaller scholarships can add up.
Parents can help with the search, while teens take the lead on applications. Start by looking close to home.
- Ask your high school counseling office about local opportunities.
- Check for scholarships offered by colleges you’re considering.
- Look at opportunities from local businesses, nonprofits, and community organizations, including the SECU MD Foundation.
- Keep track of application requirements and deadlines in one place.
- Give yourself plenty of time to complete essays and gather any documents you need.
Keep checking for scholarships throughout the school year as new opportunities become available.
3. Help teens build saving habits now
College often brings more independence, including more responsibility for everyday spending. Practicing how to save and manage money now can make that transition easier.
If you have income from a part-time or summer job, decide how much you want to set aside for college expenses each time you’re paid.
You don’t need to save a large amount for the habit to count. Choose a goal, save consistently, and watch your progress over time. The money you set aside could help with books, supplies, or other expenses once college starts.
4. Set aside money for upcoming college expenses
A Maryland 529 plan can help families save for qualified education expenses, but not every cost associated with college will necessarily qualify. A separate savings account can give you a place to prepare for other upcoming expenses.
For example, you may want to set aside money for application costs, transportation, or items your student will need when they move to campus. Keeping that money separate from everyday spending can also make it easier to see how much you’ve saved.
Parents and teens can both contribute as college gets closer. You can also use family money management tools like Greenlight to set savings goals and track progress together.
5. Build a college budget together
Saving is easier when you have an idea of what you’re saving for. Before college starts, sit down together and talk about what day-to-day life may actually cost.
Look beyond tuition. Think about the expenses your student may manage on their own and talk about which costs the family plans to cover. Then use those conversations to build a realistic spending plan.
- Start with a college budget.
- Talk about who will be responsible for different expenses.
- Update the budget as you learn more about scholarships and financial aid.
- Check in regularly once college starts to see what’s working and what needs to change.
These conversations can help families prepare for college costs while giving teens valuable practice managing their own money.
6. Get familiar with financial aid
You don’t need to wait until college starts to learn about financial aid. Understanding the process ahead of time can help your family know what to expect when it’s time to apply.
Start by learning how the Free Application for Federal Student Aid (FAFSA) works and what information you’ll need. Plan to complete the FAFSA for each year your student wants to receive federal student aid.
- Learn about grants, scholarships, work-study, and student loans.
- Check financial aid deadlines for the schools you’re considering.
- Review Maryland financial aid programs and their requirements.
- If borrowing becomes part of your plan, understand the differences between federal and private student loans before making a decision.
Maryland families can also review state financial aid information and deadlines.
Make college planning a family conversation
Preparing for college costs isn’t a one-time task. Parents can bring their experience to the conversation while teens start building the money habits they’ll use in college and beyond.
Start with the next step that makes sense for your family. Maybe that’s reviewing your college savings or sitting down together to create a first budget. Check in as college gets closer, celebrate your progress, and adjust your plan along the way.
Our team is here to help your family prepare accordingly. Explore our savings options, learn more about Greenlight, or contact our team to find financial tools that fit your family’s goals.
