Saving For College: Four Tips For Parents
November 23, 2016 | Posted by: Mortgage InGenuity
One of the prime concerns of parents, especially parents of teenagers, is how their children will be able to afford college tuition. With prices going up each year at even state and community colleges, higher education is an expense that can burden students with debt for years to come. Though some debt is going to be a reality for the vast majority of students, there are several ways parents can set aside some extra money to help their children with college tuition.
Anything is Better Than Nothing
Many parents with limited financial resources believe that there is nothing they can do to help their children with the cost of college tuition. This, however, ignores the simple financial fact that any help, no matter how small, is better than nothing. College students often go through long application processes and compete fiercely for scholarships of only a few hundred dollars. If a parent can provide even $1,000, then, it's $1,000 less that the student will have to pay off with interest later in life.
Starting Early Means Larger Savings
Many parents don't begin saving for college until their children are in their early teenage years. While parents can still put together a decent amount of money to contribute to tuition by starting at this point, it is best to start earlier and set aside a regular amount of money each month or week. Say, for example, the parents of a five-year-old decide to put just $20 every week into a savings account for their child's education. In the 13 years between the starting point and the age of 18, when most students begin their college educations, the parents would be able to save an impressive $13,520. By starting the saving process early, even minimal weekly contributions like this can add up to a substantial amount of money.
Don't Be Afraid to Ask Relatives For Assistance
Although it is often seen as rude to ask relatives for money, saving for the education of a child is a special circumstance that negates this point of financial etiquette. Relatives, especially grandparents, will usually be more than happy to help with college savings to some degree. You can try to set up a set amount for them to deposit into the savings account on a regular basis, or ask them to set aside whatever they are willing and able to on their own and to contribute it when your child begins college. Whatever arrangement can be set up, multiple people saving toward college tuition will always produce a larger overall family contribution.
Make Larger Contributions When You Are Able
For some families, $20 per week may be all there is to spare for educational savings. However, there will likely be times when there is a little more money to put toward educational savings. Income tax time, for example, produces appreciable tax returns for many lower-income families. If you receive a large tax return and do not have debts or other expenses that require the money more urgently (which should always be taken care of before setting money aside for anything), it may be a good time to put an extra $100 into the college savings account. It is also possible that a new job, a raise or other special circumstances may increase family income. If this happens, you may want to consider increasing your weekly or monthly savings contribution. Your child's educational savings shouldn't come at the expense of bills and household necessities, but if you gain additional income, it is wise to use a small portion of it to build the savings.
Unless your family is quite well off or you come into a significant windfall, chances are that your child will have to borrow at least some money toward his or her education. However, parents can easily set aside enough to make at least some kind of contribution and reduce the amount their children will have to pay back with interest later on in life. Parents who plan well, begin early, ask relatives for added contributions and make larger additions to college savings when they can will be able to substantially ease the burden of college debt when their children begin to pursue higher education.