Sending your kids off to college is one of the very best things that you can do as a parent. After all, we are living in a time when having a degree is often considered the most important indicator of future success. The trouble is, college isn’t cheap. Just thinking about the costs associated with school can be scary, especially since the price of education goes up every year.
If you’re planning to contribute money to fund your child’s education, here are six things you must do.
Know What You’re Contributing
Most parents would want to take care of the entire cost of their child’s education. However, depending on your circumstances, this just might not be possible. When it’s a choice between saving for retirement and saving for your kid’s college, you have to choose yourself. That doesn’t mean that you can’t contribute any funds, but you should only give what you can afford to.
Figure out the Costs
For those determined to cover the full amount, you will have to figure out how much that is likely to be. Start by identifying what tuition costs today and then figure out how inflation will affect that. Once you’ve calculated a target amount, you can work out how much to put aside each month by dividing the estimated total by the number of months until your child leaves for college.
Be aware that your child’s college tuition can vary in cost depending on what they’re studying. Certain courses are more expensive than others, purely because the schools need more money to provide resources, etc. If your child wants to be a doctor or get into the medical field, it costs far more to pay for medical schools for Canadian students than it will to pay for something sightly simpler, like a degree in economics. Additionally, this brings into the equation the length of studying. Some students are in college for five years, others are only there for two. Thus, the total cost will vary depending on the degree and its length.
Pick the Best Product
There are a variety of ways to save up for college. While some parents create a trust or look into the best term deposit rates, others stuff bills into their mattress. One of the biggest mistakes that you can make when saving is choosing a product that doesn’t earn much interest. This would mean that you have to contribute more over the years, which risks you not saving up enough.
Get Started Right Away
The one thing that we know for sure about college is that it won’t ever be free. In fact, over the past few decades, the cost of education has risen every single year. Because of this, you must begin saving right away. Your child may only be an infant right now, but, before long, they will be all grown up. Putting off starting to save up will make it harder to hit your savings goals.
Ask Family for Contributions
You don’t have to reach your college savings goal all by yourself. Friends and relatives are often more than willing to pitch in. Whether these contributions are small or large, every little bit will help. Graduations, holidays, birthdays, and other special occasions are great times to ask for a cash gift. Just make it clear to gift-givers and your child that any money will be used for college.
Explore Any Available Aid
Far too many people don’t take full advantage of the financial aid options out there. Even with a good income, there is a lot of support available. You could help your child apply for grants, scholarships, and any other forms of state, federal, or private funding. If you’re struggling to save up enough money, this will take a lot of pressure off.
Saving for college is a huge undertaking, so make sure that you get started as soon as possible.