• Home
  • About
    • Disclosure & Disclaimer
    • Privacy Policy & Terms of Use
  • Advertising
  • Guest Posting
  • Tools

Wealth Gospel

Earn, Save, and Invest Money

  • Budgeting
    • Behavior
  • Credit
  • Debt
    • Behavior
  • Giving
  • Investing
    • Insurance
    • Risk Management
  • Life
    • Family
    • Life Skills
    • Marriage
    • Personal
    • Deep Thoughts
    • Awesome
  • Net Worth
  • Retirement
    • Planning
  • Saving
    • Frugality
    • DIY
  • Work
    • Hustling

Saving for Your Child’s Education: Making the Right Decision

February 23, 2015 by Justin Weinger 6 Comments

saving for your child's education[This is the article two of three in my saving for college series. See the others here:

  • Why You Should Save for Your Child’s Education…and Why You Shouldn’t
  • 4 Ways to Save for Your Child’s College Education

Now that we’ve gone through the pros and cons of saving for your child’s education, I want to discuss how you should decide which direction to go. For the most part, I’m sure you already have your mind made up about it–even if you don’t even had kids. I know I did. But this decision shouldn’t be made flippantly or without serious consideration. Here are the two things that made me reconsider:

  1. The more I learned about the issue of tuition costs and student debt, the more I realized the problem is only going to get exponentially worse.
  2. Looking into my son’s eyes for the first time, I decided he deserves for me to at least thoroughly explore both options to make sure we’re doing whatever we can to help him reach his potential.

Don’t assume anything

So you think your kid is going to get scholarships? Or that he is going to work through school just like you did? The fact is, you and I don’t know much about the future. It would be really easy to plan things like this if we did. But making assumptions like this can do a lot of harm if things don’t pan out. What if the workload for your child’s major precludes a full-time job? What if your child gets scholarships but they cover the full tuition? What if she gets nothing at all? A friend of mine was accepted to a competitive private university with a 3.9 GPA and a 32 on her ACT and didn’t qualify for an academic scholarship. The point is, the best way to make this decision is to assume there is no fall back.

Talk to your spouse

It’s really hard to find a couple that agrees completely on how they should approach this. But like with the rest of your financial life together, you should always be on the same page. Go into the conversation with an open mind rather than a plan to convince the other. Keep your emotions in check. This doesn’t have to be a reason for contention. Don’t be afraid to explain your feelings on the matter, but be careful not to patronize your spouse or tell them they’re wrong. There is no one-size-fits-all answer, but the sooner you come to a consensus, the easier it will be.

Is your family protected?

As much as you might want to take care of your kids 20 years from now, it’s far more important to protect them now. A college savings account isn’t going to fund itself if you happen to die or become disabled. Make sure you have life and disability insurance on both parents, if you’re able to. In fact, it’s not a bad idea to include future college expenses when determining how much life insurance you should have.

Once you have that taken care of, start working on an emergency fund. Saving for college expenses does your kids no good if you’re constantly siphoning funds to cover car repairs or home maintenance issues.

Set your expectations

Time for a hypothetical question: If you do end up deciding to save for your child’s college costs, how much are we talking? You might decide to save for the cost of in-state tuition at the local college. My in-laws told their kids they could go wherever they want, but they’ll only cover as much as the tuition at Brigham Young University, which is owned by our church.

Your kids may end up choosing to go somewhere else, like the Wealth Within Institute for instance. But if you decide to help out, it should be on your terms, not theirs. The last thing you want is to wing it and your daughter or son ends it’s in your plan, of course).

Review your other goals

What are your other short-, mid- and long-term goals? Write them all down and prioritize them. Which ones are the most important to you? Are some more urgent than others? Unless you have a solid income, you’re likely not going to be able to tackle all of your goals at once, so this should give you a good idea as to how feasible it is to add this to what you’re already working on.

How is your retirement plan doing? There’s no reason why you should save for their education but not your own retirement. Like I said in last week’s post, they have student loans as a last resort, but you don’t have the option to take out retirement loans.

Love your kids

Your ability/desire to save for your children’s education costs is not a measure of how much you love them. In the long run, what you do in your home as they grow up has an infinitely stronger influence on their future success than the amount of money you put up for their higher education. Also, loving your kids can decrease the chances they’ll sue you for tuition expenses like this girl did. 🙂

What helped you decide whether or not to save for your child’s education costs?

(photo cred)

FacebookredditlinkedinFacebookredditlinkedin

Filed Under: Saving

Comments

  1. Emily says

    February 23, 2015 at 2:17 pm

    bahahaha! “loving your kids can decrease the chances they’ll sue you for tuition expenses”…brilliant

    Log in to Reply
    • Ben Luthi says

      February 24, 2015 at 10:06 pm

      Sad that there are even stories like that, isn’t it?

      Log in to Reply
  2. Syed says

    February 24, 2015 at 2:38 pm

    Student loans were a big reason for me. I hate paying them and I know firsthand how much they can potentially set back your financial goals. Even if my son has to pay some student loans, if I can decrease that load by even $20,000, it can make a huge difference. Having less money go towards student loans means more money for other opportunities. I think one of our main jobs as parents is to make as many opportunities available for our children as we can. And saving for college is one way to make that happen.

    Log in to Reply
    • Ben Luthi says

      February 24, 2015 at 10:06 pm

      “I think one of our main jobs as parents is to make as many opportunities available for our children as we can.”

      You’re spot on with that!

      Log in to Reply
  3. Jay says

    February 24, 2015 at 7:55 pm

    Never underestimate the power of compound interest, right? College costs actually “cost” a lot less if you save it over time due to all the returns. Chuckled at the lawsuit line as well hah.

    Jay

    Log in to Reply
    • Ben Luthi says

      February 24, 2015 at 10:07 pm

      Very true!

      Log in to Reply

Leave a Reply Cancel reply

You must be logged in to post a comment.

Recent Posts

  • Digital Deals: How to Save More When Shopping Online
  • Tips for Trading the DAX 30 Index
  • 7 Ways to Make Money in Less Than One Hour
  • Best Ways to Improve a Bad Credit Score
  • 5 Ways to Start Preparing for Retirement
  • How to Save a Little Extra Money this Summer
  • How to Avoid Living Beyond Your Means
  • Some of Your Biggest Money Wastes
  • How You Can Save on Food Expenses
  • Tricks on How You Can Save Money in No Time
  • Ways You Can Get Ahead with Your Finances
  • Key Considerations When Trading Online With Bitcoin
  • Secrets of the Headhunters
  • Credit Card Mistakes You Could Be Making
  • Top Tips When You Have the Builders In
  • Improving Your Credit Score Should be a Priority in 2018
  • Expenses You Can Save Money on Going Forward
  • Debts to Pay Off Before You Retire
  • How You Can Avoid Overspending this Holiday Season
  • Reasons Why You Could Go Into Credit Card Debt

Recent Comments

  • Credit Card Mistakes You Could be Making on How Life Insurance Can Help You Build Wealth
  • Some of the Biggest Money Wastes You Could be Making | Edward Antrobus on How Life Insurance Can Help You Build Wealth
  • Now is the Time to Get Your Finances in Order on How Life Insurance Can Help You Build Wealth
  • Ways You Can Boost Your Credit Score this Year on Budgets are Sexy
  • Money Saving Tips for 2018 on How Life Insurance Can Help You Build Wealth
  • Why It’s Smart to Use Your Credit Card for Christmas Shopping on Budgets are Sexy
  • 5 End of Year Tips for Broke Millennials on 4 Simple Rules to Make Retirement Savings Work for You
Finance Blogs

Search The Wealth Gospel

Copyright © 2023 · Magazine Pro Theme on Genesis Framework · WordPress · Log in