Here’s why you need to up your financial literacy: It’s costing you money

People usually ask about the monthly cost of a new car. Wrong question. Don’t just think about the sticker price or the monthly payment when you scout how much you can afford each month.

Based on the financing, the dealer says it will be $300, and people can see that fitting into their budget, Edelman says. But they are not adding in how much it will cost to buy fuel based on that vehicle’s miles-per-gallon ratio. Other items to consider: tolls, parking, insurance, general maintenance, garage fees. Don’t forget that some vehicles cost much more to insure than others.

Without looking at the total cost picture, you could take on an expense that seems affordable at first, but really isn’t when you add up the other fees.

Here’s how to better anticipate the real cost of college, says Edelman.

You’ll pay more than just tuition, room and board to get that degree. There are fees for various classes and activities. Textbooks are another significant expense.

But the No. 1 cost parents don’t consider is inflation. Costs are growing on average about 8% a year, says Edelman. It may not be just four years.

“The average student takes six years to get a degree,” Edelman said. “And the cost of that sixth year is going be twice as expensive as their freshman year.”

If the cost of a year of college is $30,000, many parents multiply that amount by four — but that simply may not hold true for your specific case.

Changing your major or transferring to another school can mean that prior courses aren’t accepted, and you’ll need to take more than the standard 120 credits.