Managing Your Child’s College Finances

September 8, 2008 · Posted in Students 

None of us want to see our child, or ourselves, accumulate mounds of debt from college. At the same time we want our children (or grandchildren) to obtain the best education, and have a positive college experience. Do not make the mistake of risking your financial stability for education when you don’t have to.

Don’t wait until the last minute to start saving for college. College isn’t cheap today. Have you considered what it will be when your child or children finally start? Experts suggest that the annual tuition for public schools will be a whopping $35,000 in 2017. if you want to send your child to an Ivy League school, be prepared to shell out $86,000. The idea of saving now is started sound a little better? Unfortunately less than half the parents that plan to help pay for college have even begun to save. Start the process now.

A 529 college savings plan is perfect for saving for your child’s college education. Most states allow for a tax deduction for moneys put into a 529 and it grows tax free if it’s used for college loans. It is portable and can be used at and qualifying higher learning institution in the US. These plans are also in your name so they do not affect the child’s changes for receiving financial aid. There are several websites that can provide more information on 529 plans.

Most of us can’t actually afford to cover the cost of our child’s education out of our pocket. Try to find a middle ground between your pocketbook and planning to apply to for need based aid. Paying for the college tuition, books, living expenses, and other needs is going to be very overwhelming. Remember that financial aid is based on your families income and assets, the cost of school, and if you do or don’t have other children in college. Be sure to consider everything and don’t count on aid kicking in as much as you might like it to.

Don’t just go haywire with college spending. Budget the money and involve your son or daughter in this process. After mailing tuition payments, covering a credit card, writing checks here and there, you’re going to have a major investment before you realize it. By sitting and down an creating a budget… and sticking to it, you are ensuring that there won’t be and financial bumps along the road. Financial planners are available to help with college planning, and you can usually find planner that specialize in college preparation and budgeting. You can conduct a quick internet search for more information on what you can and can’t afford and how to make it work for your family’s situation.


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