Secrets to Saving for Your Child’s Education
This article was originally published on May 10, 2017 and expired on June 10, 2017. It is provided here for archival purposes and may contain dated information.
While having a child is one of life’s greatest joys for many couples, thinking ahead to funding their college education is often one of the scariest. To help cool some of these jitters, University of Illinois Extension recently collaborated with Bluestem Financial Advisors to present the free program “5 Secrets to Saving for Your Children’s Education” during Money Smart Week, a weeklong initiative to help our community get smart about their finances.
During this free presentation, Jacob Kuebler and Josh Cutler from Bluestem Financial Advisors discussed five secrets that guardians often do not consider while saving for their child’s education. Kuebler explained that many parents dip into their retirement to help pay for their child’s education. However, this decision can have dangerous outcomes because you can always borrow for education, but no one will loan you money for retirement.
Many families throughout the state assume that the guardians will pay for the entire cost of their child’s education. However, “full ride” parent-funded scholarship may not be the best option for many families. As Kuebler explained, “College has certainly gotten more expensive. It is often not affordable for many families to expect parents to fund all the related fees that go along with it. A lot of people are setting themselves up for failure if they’re going to fully pay for all the costs they will find down the road.”
An additional thing to consider is where you save is as important as how much you save. There are many college saving options to choose from, including tax deferred options as well as taxable savings. Parents should discuss these options with a professional to figure out what is right for their family; however, one should be wary of “advisors” offering individual advice with no transparent costs. Hidden fees can cost you more in the end.
Another thing many people do not consider when looking into college is that sometimes public schools may not be the lowest-cost option. “Private schools are able to offer a lot more financial aid simply because they have a lot of private funding. They often can offer enough financial aid to make the cost of private verses public school nearly equal,” stated Cutler.
Planning ahead makes funding your child’s education much less daunting of a task. Plus, U of I Extension is happy to help you along the way! In addition to providing educational opportunities such as this recent program, our Money Mentors throughout Champaign and Vermilion County can help you plan your financial future.
Money Mentors are trained volunteers who meet one-on-one with people who need help with their finances, whether it be for short-term issues like figuring out how to pay off a credit card or long-term goals like saving for college. If you are interested in meeting with a Mentor to discuss your finances, call 217.333.7672 to complete an application or go apply online at go.illinois.edu/moneymentors.
Source: Melissa Ann Steiner Kuhl, Publicity and Promotion Specialist, email@example.com
Pull date: June 10, 2017