It’s an emotional day for you, one that you’ve been dreading for the past year; your 5 year old is “graduating” from kindergarten. Queue the tears and running mascara. How could your little baby be growing up so fast?!
Fast forward 13 years and you’re in the exact same boat, except this time, there is a lot more changing, a lot more at stake. Instead of your baby going from a half day of school to a full day, your baby might be moving half way across the country to attend college. Queue the tears and running mascara, again. While your tears are probably tears of sadness as your baby leaves the nest, they may also be tears of regret because you weren’t prepared financially to help plan out your child’s college tuition and other expenses.
All silliness aside, this is a reality for many parents. One day your kid is 5 and then you blink and they are 18 and you are left wondering where the years went. Not only that but why didn’t you start saving for their college education way back when?
The price of a college education is on the rise and does not show any signs of slowing down. The process of planning and saving for college should be just as much the student’s responsibility as it is their parents’. But how involved can little Kevin be in the planning of his future when he is yet to start first grade?
You may have heard similar advice when speaking with a financial planner about your retirement savings, but in all honesty the same advice applies to both; it is never too soon to start saving for your child’s education AND it is never too late to begin saving for retirement, either. There are not a whole lot of options when it comes to services being offered in this area that help parents map out their route of saving for their child’s future. So whether you are planning on your child attending college, or simply wish to start saving for their future regardless of education, here are a couple of tips to help you along the way:
- Start as soon as you can
As stated earlier, it is never too early to begin saving and it is never too late. No matter what your age or your child(ren)’s age, begin a savings program as soon as possible. Whether age 8 or 18, your child will reap the benefits if you simply start saving. A little extra money in savings is better than no money in savings.
- Set a savings goal that is realistic
Parents want the best for their kids, hands down. However, what good are you doing your child if you put $500 a month into their college savings and have zero money left over to buy your family’s weekly groceries? While saving large amounts is an honorable goal, you have to be realistic in how much your family can afford to contribute to such a fund and still be able to live comfortably. After all, your 22 year old will not be happy if when they graduate college and get their first big job, mom and dad come knocking on their door asking if they can move in because they went broke paying for college.
- Find and set up an appointment with a financial/college planner
It never hurts to speak with an advisor on how much you should be saving and your best options for doing so. Having someone else look over your finances with an objective point of view will better help you estimate how much you can afford to set aside each month. Not only that, but a certified financial/college planner will be able to help you estimate the costs of a college education taking into consideration inflation and cost of living prices for the date your child will be starting college.
- Consider all education options
Let’s be real. You may have a burning desire for little Ally to attend an Ivy League school, graduate with honors, and go on to have a big wig career. Those are wonderful dreams and, little Ally may totally blow your socks off and do just that. The flip side of the coin is this, not everyone goes the traditional college route. The importance is that your child gets a solid education or learns a craft/skill that allows them to make a living for themselves. There are going to be other options outside of the traditional four year plan that you should consider for your child, options that may end up costing you less. So keep your options open!
Planning your child’s future may seem overwhelming, especially if they are still very young. It may also seem overwhelming if they are quickly approaching graduation and you have yet to take any action. Don’t fret; it’s never too early or too late to start. If you don’t know where to begin, simply start by contacting a financial/college planner and set up an appointment to discuss your options.