Business & Tech
Education Planning 101
Are you saving enough for your child's college education? Here are five good tips to help finance the costs.
Whether you have a six-month old, a six year old, or a sixteen year old, the cost of a college education has likely crossed your mind. In fact, the thought of putting one or more kids through college-or college and beyond-may actually be keeping you awake at night. If you have been doing any financial planning, you may have enough insurance in the event that something happens to you, and you may be maximizing your retirement accounts-or even optimizing them-but have you saved enough for your child's-or children's-education?
The cost of college has risen dramatically in the past decade, but there are several ways to obtain a good, quality education:
- If you can save enough money in a 529 savings plan, you may be able to pay the entire amount from tax free funds. This is a topic that I will cover, in detail, in an upcoming article.
- Do your homework! Research grants and scholarships opportunities to help you reach your goals. There are countless scholarships available, but grants are typically awarded to students on a need-basis.
- Pay it later! Take out a loan for a portion-or all-of your child's education expenses. There may be a way to create more income in the next few years to help save some funds, and then slowly repay the loan after your child graduates.
- Enlist your son or daughter to help pay for a portion of their college costs. Some parents feel that if there is some "skin in the game," their kids will be more apt to make the most of their college experience.
- What about starting off with a less expensive option? Consider the benefit of having your child attend a community college for a couple of years, and then transfer to the university of his or her choice. Or, if there is an opportunity to live at home and attend school close to home, the financial impact will be diminished considerably.
To be sure, your child’s education will be a major life expense for your family. If you create a strategic plan that will enable you to reach your goals-in whole or in part-you will likely have greater peace of mind because you will be in control of your plan. And you just might sleep better, too!