Wednesday, October 14th, 2020
Posted in: Education Funding, Financial Planning
10 Tips from our Experts on Covering the Essentials of Planning for College
There’s plenty of cause for excitement when the time comes to plan for your child’s college education. He or she is moving on to a new phase in life, and preparations made today are likely to have a big impact on both the near- and long-term future. Naturally, you’re as interested as your child in making the right choices – but it’s important to make sure he or she is fully aware of the financial impacts school selection can bring.
In the first five tips of this series, we discussed the wisdom of having family financial review meetings with your child, talking about the total picture of your family’s financial challenges and future goals, reviewing the cost of college with your child, exploring all options for a great college education, and letting your child know what is expected of him/her in paying for their college education. If you need a refresher, visit the first five tips here. And once you’re all caught up, you can pick up the next five tips below – right where we left off.
Tip #6: Be careful of outside influencers.
When the time comes to start the college search process, everyone has an opinion of the best place to attend. While these recommendations can be useful, it’s important to make sure your child doesn’t blindly embrace the advice of well-meaning teachers, peers, and other parents. Feedback is great, but should always be tempered with practicality. Deciding on a college is important, and your child should look to you as a guide and mentor. You know them best – and you also understand the financial constraints vital to a whole picture consideration of realistic college costs.
Tip #7: Have your child work up a budget.
Once your child decides on a college, work with them to produce a freshman year budget from August to May. This budget should include all income (grants, loans, parent funding, summer work income) versus all expenses due per month. Is there an excess or shortfall? How will your son or daughter bridge the gap? If they’re unable to arrive at a realistic solution, they should be prepared to consider schools that are more affordable – and attainable. This exercise is a great way to give them the skills they need to make smart college choices – and to build the skills necessary for informed financial decision making throughout their adult lives.
Tip #8: Have your child keep track of expenses and income.
After they’ve finally been accepted into a college and are starting their first semester, have your child keep track of expenses and income and review after the semester. This financial exercise should be incorporated with a periodic review of grades and class choices to ensure all aspects of a well-rounded college education are in place and on track. College is a big investment – and it’s important that your child is doing his or her part by working hard, planning wisely, and making good financial decisions.
Tip #9: Delineate needs from wants.
Be sure your college student knows the difference between needs and wants. “Needs” are books, tuition, and room and board. “Wants” are a smartphone with an expensive data plan, a car, restaurant meals, or spring break in the Caribbean. Let your child know the difference, and make sure they do the work necessary to earn their “wants,” or to postpone them until they’re within reach.
Tip #10: Let your child pay the bills.
It’s tempting to pay the school bills yourself – but it’s much better to let your son or daughter take responsibility for paying school bills. If your child sees and pays them, he or she will better understand the cost of their education and the need to pay on time – or face the consequences.
Would you like to learn more about Education Funding and how to plan and strategize for education costs? Connect with a Richard Brothers financial professional located in South Portland, ME today to discover how you can secure your future with wise financial moves.