The number of news segments covering the costs of college tuition these days can make the whole university process seem daunting — especially given the number of times the phrase “rising costs” is used. Most parents’ biggest concern is not how far away their children will go for school, it is how to pay for the expenses. Scholarships and grants can help, as can the financial aid system; however, none of that assistance is guaranteed. Whether your child is a year old or a year away from going away to college, financial planning is a valuable tool to help you figure out how to prepare for your child’s college expenses.
Financial Assistance For College Expenses
According to recent data provided by CNN Money, the average private college tuition is $45,370. However, thanks to the range of financial assistance out there, the average private college student only paid $26,080. Public colleges and universities are often even less expensive, particularly if the student qualifies for in-state tuition. Even still, that can be a lot of money to spend on education.
There are a plethora of different options for financial assistance out there to help students pay for college. Some of those options — specifically some scholarships, work study aid, and federal loans — will be based on income. Other options, including many scholarships and grants, are doled out based on academic merit, athletics, and other individualized criteria. In essence, there are plenty of options for financial assistance to help lower the cost of tuition. The big caveat is that many of those options hinge on other qualifications and are, therefore, uncertainties. Figuring out how to pay for college should rely on more than just hopes and prayers.
Financial Planning For College Expenses
Often, one of the most complicated parts of saving for a child’s college expenses is the level of uncertainty involved. First, you may not know for years whether your child will go to a state school or a private university, and whether they will go somewhere in-state or not — all of which can have a big impact on the bottom line. Further, current trends can help give an idea about tuition increases, but it is by no means a verifiable amount. As many financial planners and parents of current college students will no doubt tell you, it is important to start saving as early as possible. But what does that really entail?
This is where a financial planner can help. Yes, starting a 529 college savings account can be a good place to start, in the literal sense. Financial planning can help you create a budget for your future college student, determine how much you should be saving, and more importantly, determine how much you can afford to save based on your current financial situation. While saving for your child’s college expenses can be a big part of your financial future, it is not the only facet of your financial plan. Start saving, but do not neglect your current financial needs or your retirement savings. A financial planner can also help you adjust those goals as your child gets closer to their high school graduation, and to alter your plans accordingly.
Find a Fiduciary
The most important thing financial planning provides is a road map of sorts to your financial future. Your financial planner will take into account where you are currently and what your financial goals are. From there, they will work with you to develop a plan that will help you pay down debt as well as save and invest appropriately. After all, it does not make sense to send yourself deeper into debt as you try to save for an event more than a decade down the road!
When you start your search for financial planners near you, seek out those who have earned the designation “fiduciary.” Where a financial adviser working for his broker-dealer as a broker will often sell a product and earn a commission, a fiduciary will not.
If you are ready to start saving for your child’s education, the Anchor Wealth Management team is here to help. Meet with a fiduciary financial advisor in Lanark or Rockford; contact us today to schedule.