You’ve likely heard of the 526 Plan and the education IRA from when you were a student yourself. There are also tips like getting a custodial account and ensuring that you grab that social security bonus when you retire. While all these are sound advice, they’re ultimately not as fail-proof as you expect. If your success depended on following all the tips on the web to the tee, then there should be fewer professionals today still paying their student loans, right?
This is why it’s important to start with the most practical tips if you’re beginning to build your children’s college funds. Smart methods backed up by good decision-making increases your likelihood of getting your kids to college loan-free.
Start deciding on a school
This doesn’t mean you should pressure your children to decide on a profession at a young age. It simply implies that you discuss this with them early so that they know their decision is crucial.
Involve them in the creation of their college funds and make it a comfortable topic to talk about. Once your children reach their sophomore or junior year in high school, they usually have a good idea about which school they want to attend and course to take. Regardless of some potential vagueness, any tentative thought on the matter will help you glean the total amount you should be eyeing by the time they finish high school.
If they want to become a doctor, for example, it’s good to consider early which schools they like and which specialties they’re inclined to. Would they even like to be a medical doctor, or are they actually vying to be an osteopathic doctor?
In this case, you’ll have time enough to research the best osteopathic medical schools. You can also start accounting for additional costs, like living and travel expenses. Simply coordinating the specifics of the goal with your child will improve your chances of achieving it.
Stop incurring debts
Families are usually burdened by all kinds of debts, the most common of which come from mortgages and credit cards. If you account for the interests you incur through these, you’ll be astounded with the sum you come up with.
Debts drain your money without you noticing it. Seemingly trivial decisions like using your credit card to purchase an appliance or a gadget can have significant drawbacks on the amount you’ll save in a year. The same applies to bigger debts like mortgages. It’s reasonable to aim for the house of your dreams, but if it detracts from your children’s college funds, it may be worth it to push back the purchase for a couple more years.
Financial coaches will tell you repeatedly that it’s always best to pay in full for the things you want. If it’s not possible for your dream house, it should be for the smaller day-to-day purchases you make. By simply cutting back on the debts you incur today, you may be helping your child steer clear of debts in the future.
Continue enhancing your financial literacy
There’s no shortcut to creating a sizable college fund. You’ll have to hustle daily to meet your financial goals. This is why a couple of tips and tricks here and there won’t suffice, and you’ll find that building your financial literacy over the years is a more sustainable goal.
As the times change and your children grow up, you’ll have to adjust how you handle your money. Investing in your financial literacy will keep you on top of your game even when the going gets tough. With enough knowledge and disciplined application, you’ll find that you’re not only pooling enough college funds for your children; you might actually have enough for your retirement.
Forego the shortcuts and stick to a disciplined approach. The same financial habits holding you back can be reversed to help you send your kids to university loan-free. These tips aren’t quick-fixes, but they’re a more guaranteed means to get to your destination and give your children the education they deserve.