5 strategies to help you get financially ready for college

Around 70 percent of all high school graduates in the United States go on to attend college. Of those who decide to pursue higher education, almost 70 percent of these students will have to take out loans to cover the cost of tuition, room and board, books, and miscellaneous fees.

While necessary for the majority of college-bound students, the financial aid process can be complicated to navigate.

Although completing the Free Application for Federal Student Aid, and finding local and national scholarships might be challenging, it's certainly worthwhile. Additionally, for most students, college is the first taste of the real world.

With this newfound independence also comes financial responsibility.

Through a College Foundation of North Carolina collaboration, including College Foundation, Inc. and N.C. Assist Loans, students can take advantage of ample resources that simplify the process of becoming financially prepared for the college journey. Below are five strategies to help both students and parents get financially ready for college.

Most students will need some form of financial aid to pay for college. The first step all students should take is completing the FAFSA and applying for scholarships since these limit the amount of outstanding loans after graduation.

"During your junior and senior years of high school, take some time to research and find scholarships that are right for you. A great tip is to consider applying to scholarships offered by non-traditional outlets, such as nonprofit organizations, corporations, churches, and parent workplaces. Your high school counseling office will have lists of these scholarships on hand, too," said Laura Morgan, vice president of Communications, Savings and Legal Affairs at College Foundation, Inc. "As a senior in high school, you should complete the FAFSA as soon after October 1 as possible to determine eligibility for federal grants and loans, as well as state grants for the upcoming academic year."

CFNC.org provides information on many statewide and local scholarships available only to North Carolinians.

Students should also consider national scholarship portals like collegeboard.org, fastweb.com, or collegegreenlight.com to find further scholarship opportunities. If students are still in need of financial aid, then nonprofit lenders, like College Foundation, Inc.'s N.C. Assist Loan program, offer no-fee loans with low, fixed interest rates.

Many high schools and community centers host presentations on applying for financial aid, often provided by CFNC Regional Representatives. These courses can be instrumental in helping students understand how to fill out the FAFSA, what their financial aid options are, and how much they'll be awarded.

"We hope that, after the first year, most students find a rhythm of filling out the FAFSA, getting their financial aid package, going to school, then rinse and repeat. But most students, especially high school seniors, are not familiar with everything the FAFSA does — so it's more than just filling it out on time. It also means educating themselves about available grants and scholarships that will help cover the cost of school, and learning financial aid terminology, aid options, and how to read and compare their financial aid award offers," Morgan said. "Financial aid offers are packed with a lot of important information. Understanding the financial aid offer letter also means understanding the cost of attendance at your institution, as well as what your extended family contribution is and how that's going to impact your financial aid."

For students and families who aren't sure where to start, there are several online resources that simplify the financial aid process, like NCpayforcollege.com, which is part of the CFNC network of sites. Additionally, the CFNC YouTube page has a number of free webinars, some of which are also in Spanish, covering topics such as financial aid and how to pay for college.

While understanding financial aid is one piece of the college journey, achieving financial literacy is another.

For many students, college will be their first taste of the real world — of independence, bills, and budgeting — and preparation can save time and money in the long run.

"Understanding how to make sound financial choices so you can confidently manage and grow your money is key to maintaining financial stability in college and beyond. When you're financially literate, you're able to allocate your income toward various goals simultaneously — not just to monthly bills, but to savings, debt repayment, and a rainy-day fund, too," Morgan said. "For students entering college for the first time, taking the time to become financially literate is important, and there's a broad spectrum of topics besides just being careful with your money. It's about understanding how budgeting works, how you can measure your financial health, how to set financial goals, and how loans, credit, and interest rates work."

For those looking for a crash course in financial literacy, CFNC offers a free course with a credential for high school students called Financial Basics for High School and Beyond.

Through these CFNC resources and more, students and parents can learn how to put together budgets, understand how interest works, and save more effectively, building a financial literacy foundation and a better understanding of what their money can do for them in the process.

"For a lot of students, you're 17 or 18 years old — you get that first disbursement of student loan money, and you think, 'Yay, there's money in my account,' and that's really exciting. But it's important to realize, 'I have to pay this back, and there's interest accruing.' There's a lot more that goes into it," Morgan said. "Taking the time to improve financial literacy before you reach college and understanding how bills work and why it's important to pay your bills on time goes a long way, not just in college, but also when you start your career."

If financial literacy is the foundation, then budgeting is the structure built on top of it. Creating a budget helps students track how much money they've secured through financial aid and student loans, and how much they're earning at a job versus spending each month. Understanding budgeting also allows students to determine how much money they can put toward paying off loans ahead of time.

Of course, students still want to have fun — and budgets help ensure there's money left over for things like concerts and late-night food runs too.

"Start by tracking all of your expenses for a month, and at the end of the month evaluate your spending to determine items to cut back or eliminate going forward. You might be surprised at where your money is going. Continue to evaluate your spending plan regularly," Morgan said. "There are a lot of great free tools that work as savings and budget calculators. One resource, Mapping Your Future, has a budget calculator that takes into account things like clothing, savings, miscellaneous expenses, and more."

Added Morgan, "Being able to use these free apps and tools to put together a budget while you're at school can make your money last longer — and make sure that you're spending it wisely, as well."

If students are able to start a savings account before college, they'll be establishing a strong foundation for their long-term finances. Once students have a job or source of income, they can start implementing a savings strategy that works with their budget.

And when it comes to saving, there's never a better time to start than the present.

"Whether through a North Carolina 529 College Savings Plan, a bank account, or a piggy bank, start saving today," Morgan said. "A good rule of thumb for how much you should save is the 50-30-20 rule. Put 50 percent of your income or allowances toward necessities like car payments or insurance and cell phone bills, 30 percent toward wants like shopping and dining out, and 20 percent toward saving for your bigger financial goals."