Soon after you first child is born, you will inevitably begin contemplating his/her future: will he be an astronaut? Or will she be a teacher? Whatever career your child ultimately chooses, you will, also inevitably, be extremely proud. There is another side to these pleasant musings as well – will you ever be able to afford sending them to the college of their dreams. In order to be well prepared for the day when you little bird leaves the nest, we give you some advice on how to scrape together a college fund from early on.
The Overall Cost
Since the current tuition for USA colleges ranges from a couple of thousands to more than ten thousand dollars per semester, the dilemma every parent is faced with and quite an important question they ask is how they are going to pay that much money every single year. Here is where advanced planning and a saving regime comes into play. You cannot know how much college is going to cost ten or fifteen years from now, by the time your child is old enough to attend one, but you can try doing some calculations and predictions. Depending on the type of school, where it is located and whether your youngster will be able to earn some kind of scholarship or financial aid that will make your job easier, be prepared to pile up thousands and thousands. Luckily, there is enough time, especially if you have a good plan.
A Day-to-Day Plan
Of course, it is not easy to save that much money quickly and efficiently, but if you spread your savings over a decade and start small, it is more than doable. For example, if you manage to put aside just three to five dollars on a daily basis, it will add up to somewhere between $1000 and $1500 annually, and if that is done for the next ten years, you are surely going to reach your goal. But, how to save three to five dollars every single day? It is all about sacrifices – do not eat in restaurants, stop drinking store-bought coffee, reduce smoking and switch to e-books that are cheaper that printed ones. Moreover, stop spending so much on gadgets, travels and other unnecessary expenses.
In addition to college funds, there are a couple of other ideas you can try. They include one of the 529 college savings plans that excluded college funds from taxes, to prepaid tuition plans enabling you to pay college tuition right now at the prices that are current today. Also, look into custodial accounts and even IRA accounts that can be used for paying college fees and tuitions. However, if you do not mange to collect enough money, your child can get a student loan that can be repaid in the decades to come, or they can apply for scholarships and grants that do not have to be repaid in full, or at all.
Weathering the Storms
When setting up a college fund for your child, it is also extremely important to be aware of the fact that no one knows what the future brings. Perhaps there will be a financial crisis in the country and your college fund might be hit hard. Perhaps the organization you are investing with will change ownership and this will complicate things. Perhaps the storm will be more personal in nature and you and your spouse get divorced. Experts from California Divorce Online tell us that they have seen too many cases where college funds are ruined because the spouses went through particularly nasty divorces.
Because of this, you might want to make your research even more comprehensive and try to counteract these unforeseen problems before they even happen.
Planning for the Future
It is obvious that a sacrifice like this takes a lot of time, effort and energy, but thinking of your child’s future is worth it. Ultimately, you will stop paying attention to the amount of money you save up daily and adapt this regime as a part of your life.