Parents and students today should seriously consider saving for education cost early on. The cost of college tuition is becoming very expensive, specifically if your child is considering attending a private or out-of-state college. These costs have increased nearly 30 percent in the past decade and will most likely continue in the years to come. The cost of a four-year degree at a major university when in 2010-2011 was $21,675 per year — including total tuition, room and board*.
Although these numbers look pretty scary, there are actions we can take now to help our children when the time comes for college — for example, starting a college savings plan and being proactive by saving on monthly, quarterly or annual basis. This can make it easier to absorb the cost of education. I would recommend spending some time on research or speaking with a financial professional to assist in making a decision on the best solution to save for college. Keep in mind, cost usually includes tuition, room and board, books, uniforms, and in some cases transportation.
When there’s a plan in place, parents will usually share their goals with family and friends. This can motivate family and friends to gift money to children for their future education rather than toys. It can also show others that education is important, and by sharing the planning with their children, it may help plant the seeds to furthering their education.
Saving for our children is usually at the top of the list when it comes to financial planning. However, many times parents may feel that putting away for their child’s education is more important than their own retirement. I remind them that they should fund their own retirement saving first, then consider saving for education. There are many options to assist students entering college such as loans, scholarships, and government programs.
Retirees may have social security to help with retirement, but most of the financial burden of retirement is our responsibility. Therefore, remember our kid’s education is important, but it’s critical to prioritize financial planning appropriately. We should first save for retirement, then plan for our children’s education.
*SOURCE: U.S. Department of Education, National Center for Education Statistics. (2012). Digest of Education Statistics, 2011 (NCES 2012-001), Chapter 3.)
For more information about financial planning for your children’s eduction, visit jacobgold.com.
Securities and investment advisory services offered through ING Financial Partners, Inc. Member SIPC. Jacob Gold & Associates, Inc. is not a subsidiary of nor controlled by ING Financial Partners, Inc. This information was prepared by Michael Cochell of Jacob Gold & Associates, Inc. and is for educational information only. The opinions/views expressed within are that of Michael Cochell of Jacob Gold & Associates Inc. and do not necessarily reflect those of ING Financial Partners or its representatives. In addition, they are not intended to provide specific advice or recommendations for any individual. Neither ING Financial Partners nor its representatives provide tax or legal advice. You should consult with your financial professional, attorney, accountant or tax advisor regarding your individual situation prior to making any investment decisions.