You Probably Need A ‘Senior Year Fund’ In Addition To College Savings
June 07, 2018While my friend Tania wrote about the surprise costs of senior year and my buddy Michael wrote about the wisdom of not having all your eggs in a 529 basket, the graduation of my oldest daughter Kate this month got me thinking, especially since my second daughter Rachel is going to be a junior. Parents of recent grads, I know you feel my pain — graduating from high school is expensive! I’m wondering if we don’t need to start also suggesting that parents save up a “Senior Year Fund.”
How much should you set aside for senior year?
In retrospect, having a fund for Kate’s senior year would have been extremely helpful to avoid busting the budget or even needing to dip into savings (luckily we didn’t have to go into debt, but some parents do) for those senior year costs. I’m going to be starting one ASAP for Rachel.
Post-high school plans matter
As I started to calculate what we’ll need for Rachel, I realized I’ll need even more than Kate. Kate is planning to major in Elementary Education, so her costs were a bit lower as she only looked at in-state schools. Rachel, on the other hand, is leaning towards majoring in business and is exploring private and out of state options – even though she will be getting the same 4 years of in-state cost assistance from us, the actual costs of applying will be higher.
Here is what my costs looked like for Kate and what I expect them to be for Rachel.
| COST | Kate (in-state) | Rachel (out-of-state/private) |
| College entrance exam fees | $46 | $120 |
| Kate just needed the standard ACT, whereas Rachel will need to take both the ACT and SAT, including the writing portions on both. | ||
| College entrance exam prep classes | $600 | $600 |
| Kate didn’t need a great score, but she has test anxiety so extra prep was a big help. Rachel is a natural test taker but to get out of state tuition waived at a couple of her top choices she will need to score at least a 28, probably closer to a 30, on her ACT. | ||
| College application fees | $85 | $450 |
| Again, Kate was looking at the two in-state options that excel at Elementary Ed. Rachel is looking at one in-state school, four private schools and five out of state public universities. Hopefully by the time of applications she will have it down to five but just in case… | ||
| High school tchotchkes | $300 | $100 |
| Kate lettered in both softball and choir and she wanted her letter jacket ASAP. Rachel couldn’t care less about a letter jacket even though she could get one. There are still items that are “bundled” with the ordering of announcements that will add $50 – $100 to this total. | ||
| Senior trip | $300 | $300 |
| We didn’t actually pay any cash for Kate’s trip to the west coast with a friend and her family but I used up airline points for a $300 flight. Rachel will probably get about the same. The total trip cost was at least double that, but those costs are on the kid in our house. If you plan to pay for a trip without your kid’s help – at least double that figure. | ||
| Official school events | $400 | $400 |
| For prom we got a steal on Kate’s dress at a great local store but still easily spent $250 on that night. The “Project Graduation” party after graduation was about $50 and we spent $100 on reserved seating at the graduation ceremony. That would be frivolous for most people but it was the best way to get my parents into comfortable seats and near the elevator to be handicap accessible. | ||
| Graduation party | $850 | $850 |
| The sad thing is that this was a low-key party and it still cost almost a grand. We hosted a reception for her guests and served dessert, but no meal. We did rent a room at a community center to reduce stress which cost about $80. We also had a family cook-out after the reception which was just grilling burgers, etc., but that isn’t cheap for 25 – 30 people. Plus, we hosted family at our home for several days, which meant more meals out to celebrate and more trips to the grocery store. Many of our friends had parties at home, but they served a meal so their total costs were similar. | ||
| Gift for the grad | $475 | $475 |
| This is probably the most personal number of all, but we wanted to make sure that she had a new laptop heading off to school so we combined with grandparents to get her a new laptop. Thanks Mom and Dad!! | ||
| College deposits | $400 | $400 |
| Just for the privilege of taking our money by the bushel over the next few years, we had to cut a couple of checks for admissions and reserving a dorm room months in advance. | ||
| Yearbook | $50 | $50 |
| This was so early in the year that I don’t recall exactly how much, but this is about how much. | ||
| Yearbook ad | $125 | $125 |
| Yes, in the brave new world of parenting, raising your child to adulthood isn’t enough. To prove that you love them, you must now buy an ad in the dang yearbook that they will probably only look at once, that I didn’t even remember writing by the time they were distributed. (can you tell I feel like this may be a little much?) | ||
| Senior pictures | $200 | $300 |
| Kate has a friend who does photography, so we got a little bit of a price break. The good news is that with digital you can now get all the pictures and have more options, but then if you want to have a permanent keepsake… more $… | ||
| Gifts for friends | $250 | $250 |
| We are blessed to have a great group of friends… and four of them have kids the same age as ours! So, with gifts for those kids and smaller gifts for the close friends or our daughter, it adds up. | ||
| College visits | $400 | $3,500 |
| Again, Kate knowing she would stay in-state saved big bucks. Rachel will be a different story: we have 3 short drives, one medium drive and flights to NY, TX and CA on deck. Fortunately, I have hotel and airline points to cut those total costs, but then I won’t be able to use them for a family vacation, so it still counts in my book. | ||
| TOTAL | $4,481 | $7,920 |
So again, every grad and every family is different, but use my experience as guide to at least plan on the type of expenses you may run into.
Where should you keep this account?
I’d say that it’s best to just set up a separate savings account in your (the parent’s) name. This way it won’t be counted by college aid calculations as being as readily available to pay college costs, plus if your kid decides she wants to take off and backpack across Europe, you still have the savings to support other goals.
When should you start planning?
As soon as you can adequately estimate costs, I’d say start saving. Since Rachel is just finishing up her sophomore year, I only have about 5 months until the first costs start kicking in, but about 15 months til the actual senior year costs come up. If I want to have that account fully funded by the first day of her senior year, I need to start setting aside $528 per month today. Not to mention our continuing plan to provide her with some college funding assistance while also paying for Kate. The bottom line: date nights are about to get real cheap around the Spencer house!
It will be here before you know it
Whether your kid is a freshman or a toddler – setting up a dedicated savings account for those costs may be a real blessing by the time you see your child walk across the stage. Oh yeah, trust me, it will be here before you know it!
