We all want to see our kids go to college to get a great education. There aren’t many things in life that can take you further than a quality education and a good education is expensive and going up annually.
Counting on school grants and scholarships is unreliable, and sometimes unavailable and asking your child to work full time to help pay for the tuition just limits their success and the odds are much more likely that they will drop out, or earn poor grades.
Student loans are available for them, however, with rising interest rates, these loans could haunt your child well into their adult life. Therefore, the only real solution is to plan. Education simply cannot be left to chance, and being prepared is going to ensure that your child gets the best possible education.
Planning for education is more than just putting money aside. Helping your child decide what career path they wish to choose will help decide what college they will want to attend, and what the tuition will be when they are ready to enroll. Not to mention allowing them to tailor their high school education to meet their goals.
A good financial planner will help you get on the path to setting up and starting a college fund. The sooner the better, and with the help of a financial planning expert, you can ensure that the funds you invest today will be well worth the struggle.
According to experts, the best time to set up your child’s college fund is when they enter Kindergarten. If you’ve not started yet, there is still time, if you get advice and invest wisely. Many plans can help set aside the funds your child will need.
Choosing the right plan:
Simply opening a savings account in your child’s name for a college fund is not the way to go. Savings accounts first, do not pay enough interest, and second, could cost your child money in taxes and missed financial aid.
In the federal calculation when determining what your child can receive in financial aid and grants, those assets can in the way, hindering them from qualifying for student aid or grants.
The most that a child can have in their name is about $3,000.00 without missing out on financial aid.
The 529 College plan:
This is one of the most popular plans for college funds. It works somewhat like an IRA or 401(k) and allows parents to save for their kid’s college education, tax-free. These types of plans offer tax advantages as well as financing tuition, and all of the gains are tax-deferred. Another bonus is that if the funds are used for tuition, you will never have to pay taxes on that cash.
Looking into a 529 college plan, or similar will put you at ease because it is money invested in money markets, aggressive to start, and then less aggressive as the fund grows. Saving for your child’s future can be as easy as a small monthly donation to the fund.
Invest child-care money:
Most kids of working parents grew up in childcare, with an average cost of around $5 – $20 thousand annually. If your child was in a top-notch child care center, more.
Once your child begins elementary school, you can take the money you have already been using on child-care and stick it into their college fund. Since you’re already accustomed to living without those funds, you shouldn’t miss them.
The gift of education:
Most parents realize that funding their child’s education is going to be difficult, and may not meet the entire tuition, depending on which college your child chooses. Giving the gift of education can take a little research, and planning, however, when your child’s birthday or holiday comes around, ask for the gift of education instead of presents.
You can have your gift bearers give directly to the education savings account or plan.
Get your child in on the plan:
Once your child enters High School, there is no reason why they can’t find a part-time job – trimming lawns, washing cars, babysitting. Get them involved in their own college fund. Not only will they appreciate the ability to attend college, but also they will have contributed, giving them the satisfaction of preparing for their future.
That child will no doubt appreciate college much more and strive to do better.
According to the College Board, education can be highly expensive, and the average for a public college or university can exceed $7,000 a year. For a private college or university, the cost rises to the tune of around $27,000 per year and that doesn’t include living expenses and food.
Think about it now, and get your child in on the process, and if you stick to the plan, that college fund will flourish.