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Future Fund & In-state Qualifier

By brass Staff on October 31st, 2010 • Emergency Fund, Going to college, Managing debt, Managing your money, Tuition, Life, Savings
Originally appeared in: Winter 2010Ask brass

Q: Everyone says I need an emergency fund of three to six months, but I'm only 17 and don't have a lot of monthly expenses. How much money should I save?

A: You may not have many fixed month-to-month expenses now, but those costs are coming as soon as you move out on your own. The average American spends 65% of total income on housing, transportation and food. Add insurance and incidental expenses to the mix and you'll quickly see that saving an emergency fund can be a big task. Start now before you really need the money.

Emergency fund dollar amounts are unique to each person. To find yours, start by making a list of your monthly expenses (or projected expenses). Multiply this amount by at least three, and you have a savings goal. Then add another number to the budget: the amount you're going to put in the emergency fund every month.

Remember not to withdraw for minor expenses. If you need/want something, save separately for it; you'll wish you had when there's an actual emergency, such as sudden health care or moving expenses.

Q: How long does it take to establish state residency and qualify for in-state tuition?

A: Each state differs. Most require proof of legal residence over a period of time (usually one year before admission) and intent of on-going residence. Other requirements might also apply.

  • Some states have minimum-age requirements for independent students.
  • Dependent students generally must have at least one parent who has been a resident of that state for a year.

Proof of residence usually requires at least two government-issued documents from that state. One of them needs to be dated at least 12 months before the first day of classes. Examples are:

  • Voter registration form
  • Selective Service registration form (a.k.a. the military draft)
  • A Declaration of Domicile form
  • State and federal income tax returns with an in-state address

To find state-specific info, check out the Guide to State Residency at collegeboard.com.
 

Editor's Note: When answering your questions, the editors consult with experienced professionals from a wide spectrum of industries. We utilize their expertise to give you the answers you need, but it's always wise to seek additional opinions from other professionals.

Sources: getrichslowly.org; investopedia.com; collegeboard.com; finaid.org

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