There comes a moment—somewhere between ordering the graduation gown and picking out dorm “essentials”—when it hits you: your kid is actually going to college. And whether you’re weeping into your latte or doing cartwheels in the driveway, it’s a big milestone. For them, it’s the start of independence. For you, it’s the culmination of 18 years (give or take) of pep talks, carpool lines, and (hopefully) careful financial planning.
At East Franklin Capital, we work with families who have navigated this rite of passage (and a few who are in the throes of navigating)—not just emotionally, but financially. Because, while college is about much more than money, let’s face it: it’s not cheap. And whether you’re sending your first off to a public university or your last to a private liberal arts school that costs more than your first mortgage, planning makes a world of difference.
Start Early, Breathe Easier (but don’t lose hope if you are later to the game)
College planning doesn’t begin senior year. It starts with foresight—and maybe setting aside some money. Whether you’re a parent just starting your family or a grandparent looking to leave a legacy beyond funny stories and butterscotch candies, you can play a part in helping fund future education. Contributions to college savings plans, trust structures, or even gifting strategies can ease the burden later (and sure can make you feel good). So, whether parent or grandparent, the earlier you start, the more time compound interest has to work its magic. But if you’re reading this and your child is already researching meal plans and downloading campus maps—don’t panic. There are still smart, strategic steps to take, from analyzing financial aid options to drawing on non-retirement investment accounts, or even structuring distributions in a tax-efficient way.
It’s a Big Step… for Everyone
For the student, college is a leap into independence: learning to juggle class schedules, laundry, and why you shouldn’t use your meal plan all on burritos in the first week. But it’s also a financial education—often the first time they’re managing a budget (or realizing they need one). From textbooks and coffee to streaming subscriptions and the occasional “late-night study snack” that looks suspiciously like pizza delivery, college spending can spiral quickly without guardrails.
This is a prime opportunity to introduce or reinforce financial literacy. Setting a monthly budget, tracking expenses, using a debit or low-limit credit card responsibly, and understanding the difference between needs and wants—these are all critical life skills that start paying dividends immediately. And let’s not forget: helping them avoid racking up unnecessary debt during these years can prevent financial headaches for years to come.
For parents, the shift can be similarly dramatic. Suddenly, you’re not buying weekly groceries for a full household, but you’re paying for out-of-state tuition, flights home, campus meal plans, and unexpected textbook fees (how are those still a thing?) While some household costs decrease, others balloon in new and surprising ways.
Here’s what often changes for parents:
- Cash Flow: Even if you’ve been saving for years, actively writing large tuition checks or drawing from accounts changes the feel—and reality—of your monthly budget. Planning for those distributions ahead of time helps avoid disrupting other financial goals.
- Insurance and Healthcare: Your student might now need coverage through the school or a separate health plan, and you may find yourself revisiting auto insurance policies if your child is taking a car (or not).
- Travel Expenses: Visiting your student or flying them home during breaks adds up quickly. Holiday logistics aren’t just emotional—they’re line items now.
- Lifestyle Changes: With fewer people at home, your spending may naturally shift—more date nights or travel, less on family-size grocery hauls (in our house, our youngest son, Will, has a real “Five Guys” habit… so the removal of that line item feels like paying off the house!) These shifts often mean opportunity as well. Redirecting this spending into retirement accounts, taxable investment accounts, or even a college fund for younger siblings can pay off in the long run.
So, while your student is budgeting for pizza (burgers in Will’s case) and concert tickets (and hopefully textbooks), you’re budgeting for tuition, transitions, and the next phase of your financial life. The college years require two parallel financial strategies—one for the young adult you’re launching, and one for the life you’re stepping into.
After the Last Tuition Check
Here’s something most people don’t talk about: the financial landscape after college. Once tuition payments are behind you, there’s often a window—before grandkids enter the picture and long before you’re considering what old age feels/looks like—where your financial flexibility increases. Your cash flow gets a little breathing room. That’s a perfect time to reassess your long-term financial goals, boost retirement savings, or even start investing with an eye beyond your mortal lifetime. And if you’re still helping your college grad launch into the world—be it with rent support, job connections, or pep talks about credit scores—your planning evolves again. Because while you’re no longer paying your child’s now-Alma Mater, financial support often continues in new forms.
The Bottom Line
College/leaving the nest is a major milestone. It’s a launchpad for the student—and a pivot point for the parent. And while the emotions run deep, so do the financial implications. The best gift you can give your future college student (or grandchild) is a plan—one that starts early, adapts as life unfolds, and considers what comes after the dorm days are done. It’s not just about helping them get into college and out of the house—it’s about getting everyone out of it financially sound.
P.S. I am writing this as we head off to Auburn University to drop off our youngest at orientation. Not yet the “official” drop off, but a bit of a test run. So… this is a topic that hits close to home – literally.
