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As a parent you know from the day your child is born that you need to plan for their future. That includes planning for their college education. College is such an important part of your kids’ future, and we know all too well what student loans can do to your finances. In 2014, the average college graduate owed $33,000 in student loans, triple the average of 20 years ago. Imagine how that number will grow by the time our children reach college age?
After going through undergraduate school and then graduate school, my student loans became more than my own home mortgage. With such a large amount owed each month just for my education, it became a burden that put our family into debt in other areas. Planning for your child’s future is important from the moment they are born for this reason. You don’t want them to have the same struggles we have had.
How To Plan For Your Child’s Financial Future
Start saving early. As soon as your baby is born, or even before they are born – you should open a customized tax-advantaged account to begin saving money for their future. This helps your money grow faster than a standard savings account. Check out the graph to see just how much of a difference it makes.
This account can be set up easily to automatically take money out of your paycheck each week, or an auto draft from your bank account on a monthly basis. If you think you can’t really afford to put money aside, you are wrong. If all you put aside is $5 a week for 18 years to a FutureAdvisor tax-advantaged account, you’ll have a projected $10,000 to put towards their college education!
Use a Financial Advisor for ultimate savings. Just saving money isn’t enough. Unless you have a lot of excess funds to put aside, your $5 per week investment is not going to pay for their entire education. You can however, take that $5 per week plus other random amounts as they grow up and use a financial advisor like FutureAdvisor to help make sure you’re growing that money as much as possible WITHOUT losing money in the process in fees.
FutureAdvisor’s “Diplomas without Debt” product helps you put your money to use in the right ways in special tax-advantaged college savings accounts. It’s 100% free and takes care of all the complicated parts of setting up the right account. Since they open all of the accounts for you, there is no guesswork about what account type is best for your needs. No complications or frustrations. Just sign up and decide how much you want to contribute. They’ll handle the rest. The result is larger savings, safer savings and easier to access savings when colleges come calling.
Encourage them to contribute as they earn money. Don’t forget to teach your kids about financial responsibility. One of the biggest problems I faced as an adult was the fact that my parents hadn’t shown me a good financial life. Not only did they live paycheck to paycheck, they tended to be in deep debt more often than not. It was a real struggle when I had no savings but had to take out loans for my own college education.
Start your kids early and work with them on understanding how to be responsible with their own money. That means encouraging them to put money aside for college and contribute to their tax-advantaged investment account. It also includes not spending more than they can afford to spend.
Securing a plan for your child’s financial future is all about beginning early and working diligently. No matter how little you are able to put aside each week, you can make a difference in what their future will be like. Even if you are only ever able to put aside that $5 per week I mentioned above, you have still done something positive toward their future and college education.
How do you plan for your child’s financial future? Do you have any other tips or tricks to build their college fund? Share in the comments.
21 thoughts on “Tips for Planning for Your Child’s College Education”
The school is very useful, indeed, the training is very expensive, as a writer with https://papercheap.co.uk I can give you the following data: the How do I get paid for school? for students. Almost 9 out of 10 families have always known that their child will go to college. But less than 4 out of 10 families have ever got a bill of money. In 2008, about 58% of the families were interviewed for the report that they had to give up some colleges. This year the figure was 69%. the report, released by Sallie Mae and Ipsos, is based on a telephone survey of 800 parents and 800 students aged 18 to 24 years. It can be seen from the statistics that for the most part, parents have to rely on their own means to give a decent education to children. It is obvious that not every parent can allow the education of his child from current incomes. Does this mean that a good education is not available? Not at all, if you think about the sources of funding for education as early as possible, even before the time comes to enter the university. In developed countries for a long time there is a simple solution to this issue. They create a family fund for the education of the child (capital specifically designed to meet this financial goal). In Germany, for example, a funded program for education opens right in the first days after the birth of a child. And it’s not early.
I am hoping to have enough money saved to pay for my children’s college.. and to have them work through college to help support them. I do not want them to take out loans.
Starting saving as early as possible is a wonderful plan. That way, you don’t have to stress as much.
College is so expensive. It’s always great to have a plan.
I have been saving for my kids education since my kids were little. I want to make sure that they can go to school with as little debt as possible.
That sounds like a great tool! I’m definitely going to check it out. Thank you!
Yep – I could have spent my money on my son a lot wiser – I did pay for his college until he just started fooling around too much – now he’s doing online and working – and we do help – but I didn’t have a fund set up! If wishes could be true :)
I have been saving for my kids college ever since they were born. My son just competed his first year of College and my daughter will be starting her first year in the fall.
My husband has a portion of his paycheck deducted for their college fund. It’s not a huge amount, but every little bit will help them when college time comes around.
We have four kids, it’s going to be really hard to pay, but these are great tips!
These are great tips. I’m so glad both my kids have graduated college!
When it comes to planning – there is no such thing as ever too early. :)
So important to start early. This is something kids shouldn’t have to worry about.
My husband learned the hard way, he went away to a university for collage which wound up costing a lot more money. We definitely encourage our children to get necessary credits local at community college. We are hoping since we homeschool they they will scholarships.
We started a college fund for our son within two weeks of his birth. We used money we’d received at baby showers to get things going, and now we put money into it every month. It won’t cover everything, but I know it’ll help!
It’s so important to plan ahead for your child’s college education. It’s nice for them to not have to worry about finances when they are starting out their lives.
I wish I had more to set aside. I know how important college is so we will have to work together when the time comes.
It’s never too early to start planning for your kids’ futures. I’m glad we had a plan for ours.
Great tips! We have 6 kids and have funds set up but it’s tough always having money to put in. Luckily our govt has great resources set up for children and it isn’t so bad!
It must be hard trying to make sure the money is there especially as prices seem to just be going up and up.
We have some money saved, but they will be taking out student loans like the rest of us when it is their time.