College is expensive, there’s no getting around that. According to the College Board, the current cost of tuition for a public four-year university averages around $9,410 a year for in-state students and $23,890 a year for out-of-state students, with private four-year universities averaging around $32,410 a year. Now multiply that number by four years and add in the cost of housing, books, food, transportation and other expenses. If you have young children, these numbers will continue to rise each year. Scary to think about, right
Since September is College Savings Month, it’s the perfect time to learn ways to start setting aside money for your child’s education now. Gregg Murset, a certified financial planner and CEO of BusyKid—a digital chore tracker that simplifies allowance and teaches kids how to manage their finances—says that it’s important for parents to get kids involved in saving for college early on.
As a father of six kids ranging in age from 9 to 18, Murset knows a thing or two about the importance of saving for his kids” futures—his own 18-year-old son has already saved $12,000 over the years. With a little financial planning, you and your child can start saving money now to help offset college expenses later on. Here are Murset’s five tips to help parents and kids begin saving.
With the cost of a college education growing by leaps and bounds each year, parents must start a college fund as soon as baby comes home. Do some research on banks or credit unions that provide special college accounts or higher interest for college funds.
Let Others Pitch In
Typically, there are 19 years of birthdays and holidays where family and friends give gifts to your child. When you’re asked for gift ideas, don’t be afraid to request money for a college account. Add these funds to already established accounts — every little bit will help.
Stay Away From College Loans
Of course loans seem like an easy way to cover the costs —that’s what the lenders want you to think, says Murset. The next thing you know, your child or you have thousands of dollars in debt with years of payments ahead. Don’t use loans as your plan for paying for college.
Require That Kids Help Out
There’s nothing wrong with your child getting a job and putting money towards some of the college expenses. Doing jobs around the house when he/she is young is also a great way to learn the meaning of work ethic, responsibility and accountability. It can set the stage for what he/she will experience as an adult and provide lessons in budgeting.
There’s also nothing wrong with paying for good grades. You’re going to have to pay for your child’s education at some point, so it’s better to pay a little here and there now rather than a lot later. If you incentivize good grades at a young age, kids may be more motivated to do well in school, which could lead to scholarships one day and relieve some of the financial burden.
Match Their Success
As kids begin saving or sharing money as part of the budget they created, consider matching the deposit or donation as extra incentive. Not only will it provide additional motivation, but it will also increase the level of communication between parents (or grandparents) with the child. Many banks have begun “matching programs” for kids in order to motivate them to save more and increase interaction with the organization.