Your child’s college education comes with many benefits. College can help your child discover who they are and explore education opportunities not possible otherwise. The college experience can also set them up for a successful career. But it comes at a price.
The cost of a college education keeps going up. The cost for college texts keeps rising. Tuition itself increases in price. Saving for your kid’s college education is essential if you want them to be able to attend the college of their choice. This article will give you simple strategies to save money on college expenses.
1. Start Preparing Early
There are things you can do to prepare for college long before you need to look into financial or scholarships. Many experts recommend applying for scholarships no later than the summer before the student’s senior year of college, but you can start college prep as early as sixth grade.
Help your child understand why college is so important. In elementary school, time moves differently. To children at that age, the next major holiday feels like it’s eons away. Next summer will “never get here.” Start by impressing upon your child how college will help them later in life. In later grades, your child can be encouraged to pinpoint what career they may want, strive for advanced placement, and other goals that will benefit them later in their education.
2. Encourage Goal Setting at an Early Age
Have you ever heard of a “career student?” Devoting oneself to education is an admirable goal. But bouncing from one class to another and switching majors several times can cause an already expensive education to skyrocket even further.
By introducing your child to the concept of setting goals at an early age, you’ll be instilling in them the ability to focus. While any person has the right to change their minds as they get older, goal setting can help minimize wandering aimlessly through classes.
Another big advantage of goal setting is academic performance. People of all ages who set goals properly have better focus. They get more done with fewer distractions. Goal setting also teaches kids accountability. Instead of blaming someone else or outside influences, they learn to take control and get things done.
3. Focus on Academic Achievement
If your child excels at school, they may qualify for more scholarship opportunities. While studying and getting higher grades seems like a no-brainer, there are websites and apps for test-taking to help students. Some of these resources include timers, live learning sessions, and much more. Technology has given us the capacity to achieve more than ever before!
4. Research Scholarship Options
What are your child’s strengths as a student? Understanding their high points is an important first step toward applying for the best (and sometimes easy) scholarships. You’ll want your kid to start applying for scholarships no later than the summer after their junior year. Applying for scholarships in high school helps you get in front of the pack.
Is your child gifted at writing? If so, investigate essay scholarships, which place a premium on writing. Is your student the first in your family to attend college? That also opens up a world of scholarships for first-generation students.
5. Explore Money-Saving Options
There are many creative ways to save money without sacrificing your lifestyle. You simply have to know where to find them. There are simple web browser extensions that help you automatically save money while you shop online.
You can also change some habits to save money. Avoid impulse shopping. Stay away from the Internet when you are feeling down. “Retail Therapy” is a very real thing and an easy way to burn through savings fast. Another simple tip? Stay away from ATMs. These wonders of technology make accessing your money easy. That’s great for an emergency, but not so great when you are trying to save.
6. Other Investment & Savings Plans
There are endless ways to save money and earn money at the same time. While many of these can help you sock away a nice nest egg for your child’s higher education, there are downsides to some. For instance, having more money in your savings may mean your child is not eligible for as much financial aid. As always, weigh the pros and cons of each before deciding.
- 529 Savings Plan – Contrary to popular rumors, you cannot lose money in a 529 savings plan. These plans have many advantages, such as flexibility, higher limits on contribution, and low maintenance. One disadvantage is that a 529 plan must only be used for education.
- Rental Properties – If you are a parent planning now for your eight-year-old’s child’s college education, you can make a lot of money with rentals. Properties tend to go up in value over time, so you can earn a big payday when you are ready to cash out. That rental property you buy for $80,000 might be worth $160,000 years later. And by paying down the mortgage over the years, you may only owe $55,000 on a property worth $160,000, leaving you with a $105,000 nest egg.
- Bond Ladders – Bonds are a simple idea. You invest a certain amount of money, such as $10,000 for ten years. If the bond pays $500 per year in interest, at the five-year mark, you receive $5000 in interest plus your original $10,000 investment. Creating a bond ladder involves a series of bonds that mature one after the other. Schedule them correctly, and you’ll have large amounts of money just as you need them, such as when your child is ready for their freshman year, and so on.
This article has provided you with several ways to save money for your child’s college education. Some ideas are more traditional such as long-term investments. Others focus more on saving money for day-to-day living. Your best options will likely depend on your current financial situation. A recommended first step is to sit down with your accountant or financial planner. The two of you can work out a strategy tailor-made for you.