Are you Financially Prepared for your Children's Education?
As financial costs are on the rise, and more and more parents struggle to help their children pay for college, we offer you a tried and true plan for sending your children through university without saddling them (and yourself) with years of debt that may never be repaid.
The Big Question: Can I afford it?
Many parents would like to pay for their child to attend college, or at least monetarily assist in some way.
For most adults, the financial preparation process starts several years in advance of your child’s graduation. Unless you have a large amount of money coming in, you will have to save a little bit at a time to afford the high costs of college. If you push off planning for your child's financial future, you may be left in a very difficult situation, with not many financial options.
How much will college cost in the future?
The average cost for a 4 year public institution is growing rapidly. These days, your kids will have to pay about $18,000 a year for a public institution. If you have to take out loans, some with as high as a 7 % interest rate, you could end up paying over 100,000 dollars for a 4 year education! Not only will there be costs for ordinary classes, but for fees, books and classroom supplies, living expenses, transportation and any other individual expenses.
How will I pay for it?
You have a few options for helping your child financially prepare for college.
1. Receiving private Loans
2. Obtaining financial aid loans
3. Pulling from personal savings or investments
4. Having their child apply for a FAFSA
5. Saving personal income over time.
How much should I save?
You need to save as much as possible as early as possible. Try setting up an automatic withdrawal from your bank on a bi monthly basis. You can build a large amount of money up if you plan to save over time. Start by plotting out how much you think a full college education will cost you and your family. Then decide how much money you will be willing to contribute to the cause. You can cut back on non - essential spending. You can choose to not eat out. You can reduce your living amenities (cut down to one vehicle, for example.) You can add bonuses or tax refunds to a separate bank account to save. You can ask that everyone in the household get a part time job, even kids. You could choose a job with a higher rate of pay. You could reach out to relatives for college money instead of gifts.
Start a savings program early
If you develop an account when your child is young, and follow the guidelines listed above, you will be able to financially support your child. If you are able to put a considerable amount of money in an account, you will benefit from earning interest along the way.
By thinking ahead, and making sacrifices, you can help your child plan for college far in advance.
