The average income for a college graduate is $44,455 compared to around $25,000 for those who have only a high school diploma. While parents work hard to give their children the best opportunities, the rising cost of tuition at a four-year university can make saving for your children’s education seem like an impossible task.
Here are 8 tips to help you save for your child’s educational future:
- Start Small if you need to, and be consistent. Taking a moment to set up an automatic deduction from your checking account for a small amount early in your child’s life can help build this money faster. Think of subscriptions we sometimes use – like Netflix, Hulu or gym subscriptions. These are designed to be small forgettable amounts. You can apply this same thinking to your savings and you may be surprised at how much it grows! Engage your would-be college student as well. Consider setting up a family matching program for funds they earn on their own.
- Oklahoma Promise: The Oklahoma Legislature has set up a unique program for eighth-, ninth- and 10th-grade students (homeschool students must be age 13, 14 or 15) that will help pay for their college education if their parents’ income from taxed and untaxed sources is $50,000 or less at the time the student applies for the program.
- Oklahoma 529 Plan: This low cost investment program allows you to invest money saved into managed funds to help your child’s college savings grow faster. The funds can be used to fund education nationally. Be sure to check out approved ways to use these funds if your child decides not to attend college.
- Your Retirement Should Come First: Though it is important to try to help our children with their education, it is actually a lower priority than your own retirement savings. If you have a matching 401K option at your place of employment, be sure you are contributing the maximum amount for matching funds. If you have another option in your workplace, familiarize yourself with how to participate. You can also check with your financial institution for recommendations on starting an Individual Retirement Account.
- Research Grant and Scholarship Opportunities: Google.com is a great place to start. You can also inquire with your local educational resources and check out your public library for resources and workshops. You may need to do a little footwork, but it could be well worth it.
- Plan Out How You Will Spend the Money: Completing the first two years at a community college could save big in the journey toward obtaining a degree from an accredited four year university. You may also be able to work with a local technology center to obtain inexpensive concurrent enrollment while completing high school. Also be sure to read our article on Student Loans – Taking Out New Loans and Repaying What You Owe.
- Consider Living at Home for University: This calculator from CNN Money helps you predict the costs of college. A substantial expense is room and board for your student. Consider keeping your child home with you during college to save big. Sure, it isn’t quite the “college experience,” but it may allow your child to have a much better – and affordable – education. Saving $20,000 for the bulk of a degree seems much more doable than what could be close to $100,000 to cover all the expenses of a student away from home for four years.
- Don’t Forget to Check Out Alternatives to College as a Supplement to Education: Apprenticeships, mentor-ships, volunteerism and local technology centers can be a fantastic way to help build your child’s skills while he or she is in middle and high school. Skills will be the determining factor in helping your child succeed both during and after college. See who is in your life and in your community who may be willing to invest in your child’s efforts at skill building.
Do you have more ideas to share? We would love to hear from you.