It is hard to believe that September is almost here. This means that it is back-to-school time. But even if your child is in primary school, sooner rather than later, the big college tuition will loom over you. Most parents expect their children will attend college, but many of these parents have saved no money at all for college.
What should you do? With education costs rising at an average of six percent per year, start saving today. A four-year public university education could cost well over $100,000 and private school could cost over $300,000. These are big numbers; which is why it is important for many to begin a savings strategy immediately. The cost of waiting can be substantial to your family. Choose to involve your child. Of course, this will depend on your child’s age and your circumstances. You may help your child select a school that costs within your range; otherwise, you will need to plan for the financial difference. This difference can be made up from scholarships, part-time jobs, savings or debt after college. Lack of money isn’t the only reason children may be asked to contribute or shoulder debt. Blended families with ex-spouses may have chosen not to contribute or haven’t agreed to pay tuition as part of a divorce settlement. Whatever the reason may be, it needs to be presented honestly to the child so that funding options can be carefully planned. As a parent joining in this effort, it will give you an opportunity to teach the economic realities of life. As you look for ways to reduce or manage the cost, let them be the first to suggest a less expensive school. If that doesn’t occur, feel free to suggest options yourself. Get advice as early as possible. Even if your child has only a short time until high school graduation, get advice tailored to your own situation from a financial advisor. Parents often forget that their first financial goal is retirement planning, not college funding.
For more information, contact Rebecca Robins, CPA/PFS, CFP®, at 661-702-9680 and visit the office at 25001 The Old Road in Stevenson Ranch. You can also send postal mail to 6333 North State Highway 161, Fourth Floor, Irving, TX 75038, or call 972-870-6000.