Financial planning for parents of babies to be ready to pay for college
One day you’re bringing your new little bundle of joy home from the hospital, the next day they’re off to kindergarten and the day after that they are off to college. Ok, it’s not QUITE that fast but you get the idea – time flies when you’re having fun. Because it won’t be long until your baby is heading to college it’s important that you start saving for that time now. In fact, if you haven’t started planning, preparing and saving by the time your child enters kindergarten, you’re just about five years behind the eight ball.
Even if you haven’t started until after your child is of school age, it’s never too late to get moving. However, be sure that you are being realistic in your planning. The average cost of tuition at a public university is almost $43,000 and a private school can cost almost $110,000 – increasing more than 40% over the past ten years and will without a doubt continue to rise. Many schools offer prepaid tuition programs that freeze the current rates to allow you to pay off the tuition.
There are also state-operated college savings plans called Section 529 plans. These allow not only parents but also grandparents, relatives and even friends to put money aside to help offset your child’s tuition expenses.
Another option you may have is to invest in an educational savings account. While these accounts are typically small – only $2000 per year – it’s still a help with books and supplies even if it doesn’t do much to offset the high cost of tuition.
Before you can truly prepare for your child’s education costs, you should first have your own solid, financial plan and make sure your goals are prioritized so you know the exact steps you’ll need to take to reach them.