Saving for your child’s college tuition can be challenging but working with a financial planner on comprehensive financial planning can make saving much easier to navigate. Wherever you are in the process, here are some questions to ask your financial planner about saving for college:
How much should I save?
With the changing cost of tuition, it can be difficult to figure out what your savings goal should be and how much you should save each month. If you’re unsure how much to save, this is a great question to ask your financial planner. They can help you calculate how much you’ll need to save based on your child’s age, the projected cost of tuition, and any scholarships or financial aid awards that you anticipate receiving.
How do I save efficiently?
There are many options when it comes to saving for college, and a financial planner can offer advice about the right savings vehicle that works best for your family’s financial situation. They may recommend special tax-advantaged college savings accounts like a 529 plan, Coverdell education savings account, or another investment vehicle. In conjunction with a tax professional, they may even be able to offer advice about how to make tax-efficient contributions and withdrawals.
How do I save for multiple children?
Sending your kid to college can be a huge financial undertaking, and it becomes more challenging if you have more than one child. The costs and fees can add up quickly, and they may end up at different schools with different tuition costs, scholarships, and financial aid.
Fortunately, a financial advisor can take your overall financial situation into account, including things like your children’s ages and whether they plan to attend a public or private college, and help you come up with the best strategies for saving tuition for more than one kid.
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How can I fit college savings into my budget?
Financial planners can help you budget to reach a financial goal. So, asking how you can set aside money for college savings is a great place to start.
They may figure out how much is reasonable to contribute and suggest different strategies, like reducing your overall expenses or contributing a certain amount every month. A planner may also ask questions to determine where saving for college is as a priority in relation to your other financial goals, and help you budget accordingly.
Should I take out loans?
With the number of loan options out there, deciding which ones to take out – and whether to take them out at all – can be overwhelming. If you’re not able to save the entire amount needed for college, you can discuss your other options with your financial planner.
They can educate you on the resources and strategies available to finance college costs, explain the potential impacts of loans on your (and your child’s) overall financial plan, and plan for how student loan debt can be repaid in the future. Your financial planner will work together with your other advisors, such as your tax professional, loan service provider, or banker, to help you determine the best path for your situation.