By: Jim Watson, Vice President of Trost Financial Consulting

I came across this great college cost calculator which allows you to estimate what college expenses will be for your children. We know…this can be a difficult number to digest. That’s why we wanted to put together a few tips on how to best save for your children’s college expenses, starting now.

Click here to find out how much you may need for your children’s college tuition.

When I entered information for my oldest son into an online cost calculator, I was shocked to find out that the estimated four-year cost for a California state school could be over $175,000. Private school options were almost $400,000! Now is the time to start employing the available strategies to assist us all with the increasing amount we’ll need to help our children attend college.

Below are a few tips to help you save for your children’s college expenses.

 

TIPS TO SAVE FOR YOUR KID’S COLLEGE

  • Tip 1. Open a 529 college savings plan or Coverdell Education Savings Account (ESA). Ask family members and friends to contribute. Suggest that instead of buying your child presents, they give money toward your child’s 529 plan.
  • Tip 2. Plan a college-savings strategy with your children’s involvement. This could include earmarking half of allowances for college, which can help to create an awareness of your child’s responsibility to save for their education.
  • Tip 3.  Apply for financial aid. Financial aid assistance can be available to students based on mean testing. Before entering the child’s freshman year of college, all students should apply for financial aid.
  • Tip 4. Suggest community college first, with a plan to transition to a university for the final years of their college experience. This step can cut costs way down.
  • Tip 5. Consider a prepaid tuition plan. Some states offer a prepaid tuition option in their 529 plans. Ask your financial advisor for more information on this!
  • Tip 6. Take advantage of the UTMA or UGMA (Uniform Transfer/Gift to Minors Act). These are basically custodial accounts, which are used to hold and protect assets for minors until they reach the age of majority in their state.
  • Tip 7. See if your student’s high school offers dual credit and/or advanced placement courses, which count as college credit hours.
  • Tip 8. Consider a school loan. There are many options when it comes to obtaining a loan to pay for college including need-based, non-need-based, state loans and private loans. Each has its own set of pros and cons and the best loan for you might not make the most sense for the next family. On one hand, when students have a financial obligation tied to their education, they may take their college experience more seriously. On the other hand, interest can be quite high, causing already expensive college costs to be that much more difficult to repay. Loans sponsored by the government offer fixed interest rates which are often lower than private options.

 

We hope this list reassures you that there are many options when it comes to saving and paying for your children’s college tuition. If you’d like to discuss these tips in more detail, contact Trost Financial at any time.