Don’t Go Broke Saving For Your Child’s College Education!
As a parent, it can be unsettling to think about how to afford your own retirement while saving for your child’s (or children’s!) college education as well. A four-year public college education averages out to a steep $40,000 and those costs don’t seem to be lowering any time soon. Don’t panic just yet though, you have several options that will help you succeed at both retirement and college education savings, without breaking the bank.
Adjust Your Budget
If you’re struggling to pay off high interest debt, it’s important to tackle that first before you start saving. Once you have done that, factor the college education into your budget. Cut back on certain luxuries to put back $50 or $100 a month into a savings account. Remember, you don’t have to be stressed thinking you have to foot the whole bill. While college can be supplemented with scholarships, student loans, and other source of financial aid, retirement will not.
529 Savings Plan
If you’re hoping for a more sizable amount to save, consider opening a 529 Savings Plan. The first type of 529 includes purchasing credits from a school to secure current tuition rates. The second type is a savings account that invests the money you contribute. Keep in mind that this type of account can only be used for school related expenses and you could incur high penalty fees if it is used to purchase anything otherwise.
It’s important to stay in constant communication with your child about their future college plans and financial goals. Start having these conversations as early as their first year of high school and be open to the fact that their minds could change. Be transparent about how much you will be able to contribute and discuss how they plan to afford the rest. This ensures that both parties have an accurate representation of what college will be like in a financial sense.
The most important advice we can give is to research financial aid options early. Many people are not realistic about college expenses and scramble for last minute options to afford the bill. Fill out a FAFSA form early, even if you don’t feel like you will qualify. Also, many people feel that they need to be a straight A student to qualify for decent scholarships. This is simply not true. Research scholarship programs at the high school, libraries, or ask around to other parents whose children have attended college.
This article here gives further details so you can avoid having to pick between saving for your own retirement or setting up your child for success. In addition, if you need help getting your credit situation intact so you can start preparing for your child’s college education, it’s important to have a professional like the Credit Care Company on your side. Please contact us today!