Jared Young has thought about paying his children’s college tuition his whole life. Longer than that, in fact.
“Before they were born, we thought about it,” says Young, 52, of Castalia, Ohio.
With two sons in college now and two sons in high school, he and his wife Jody are busy finding enough money for multiple college tuitions. The good news is that they started saving when the children were newborns.
“I set up a 529 plan for each of them,” Young says.
Whether you started saving early like the Young family or you’re just starting out, here are 11 ways to manage multiple college bills.
11 tips for affording college
1. Use 529 plans. Looking for a place to stash your kids’ college savings? A state-sponsored 529 college savings plan is a helpful resource.
“In many cases, it’s the best tool for saving for college,” says Ryan Derousseau, a certified financial planner at United Financial Planning Group in New York. “The money grows tax-free if you use it for qualified educational expenses.
“And,” he adds, “with the new laws in place, if your child decides not to go to college or gets scholarships, a portion of the 529 funds can be moved to a Roth (retirement savings account) for your child or you can move the 529 to another family member who wants to go to college.
Learn more: The pros and cons of 529 savings plans, prepaid plans, and how to decide
2. Start early. If you have many years before your children become college students, make good use of this time and start saving early.
When to start? As soon as you can
“Beginning a process of regularly contributing to your children’s education, such as through a 529 plan, is ideal when they are born. This allows investments to grow over time,” says Ryan Johnson, founder and financial planner of Hundred Financial Planning, which is expected to launch in Grand Rapids, Michigan, in early 2024.
But not all families will be able to start so soon.
“This isn’t always a reality for some families, as they have less disposable income when (children) are younger,” Johnson says. The natural starting point is…as soon as you can.
Turning a salary increase into a savings opportunity, rather than improving your lifestyle, is a great strategy, he adds.
3. Involve your family in paying for college. Grandparents, aunts, uncles, cousins, and family friends may all want to contribute to your child’s college education. Ask them and allow them to participate.
“Have open conversations with grandparents and others who are willing to help in the early years of your child’s life,” says Vida Jatulis, a certified financial planner with MainStreet Financial Planning in Westlake Village, California.
Learn more: Why grandparents should set up 529 college savings plans
Manage your children’s expectations
4. Be realistic about how much you can pay. College is expensive, and paying all four years of tuition for two or three children may not be feasible. Be honest and upfront with your children about this possibility.
“I have a couple of clients who have three kids in college. They were very clear with their children that they would pay the first year of in-state tuition. After that, kids will have to finance their college through loans or work,” Derousseau says. “Kids have clear expectations while parents keep a promise they can keep financially. It won’t pay the entire tuition, but it will contribute significantly to reducing the kids’ college costs.”
5. Be smart with your college savings budget. Money can be incredibly tight when you have two or three students in college. Keep an eye on your budget.
“When you have multiple kids in college at the same time, there will be years where college costs overlap and expenses are really high. These large expenses can devastate the budget!” says Jatulis. “Create a college financing strategy that takes this into account and strives to level the demands on your budget. For example, it may make sense to use cash flow when you have one in college and delay using grandparent funds/529 plans until the years when you have multiple children in college.
Consider alternatives for a year or two
6. Attend a low-cost community college for two years. Rather than attending expensive four-year colleges, opt for less expensive community colleges for the first two years of your children’s college education. This will help dramatically reduce your tuition costs.
“Since the first two years of college are focused on completing general education course requirements, it can save a tremendous amount of money to start at a community college and then transfer to your college of choice,” Jatulis says.
7. Think about state universities. Another way to reduce the multiple and large costs of college tuition is to attend low-cost state colleges and universities.
“Expecting to save for three children who will attend Ivy League schools is expecting a lot. Instead, try to save enough to afford state schools,” says Derousseau. “If your child prefers a private school, then you have funds to help him while he can use other resources to pay the difference. This will also give them ownership over the college decision.
8. Add travel expenses. If your children are interested in out-of-state colleges, keep in mind that your 529 college savings plan cannot be used for travel expenses to and from college.
“Travel is not an eligible 529 Plan expense, so if your children will be going to school out of state, that is an expense you will need to cover with cash flow or other savings,” says Jatulis.
9. Apply for grants and scholarships. A great way to reduce college tuition costs is for your children to receive grants and scholarships.
“Encourage your children to seek scholarships/grants. There are many programs out there. Most people don’t take the time to look into the vast financing opportunities,” says Brandon Gregg, a certified financial planner at BBK Wealth Management in Lafayette, Indiana.
More: Desperate parents will pay top dollar to lower the price of college
Ask your children to contribute
10. Ask your kids to help save for college. Involve your children in saving for their college education. A part-time or summer job while you’re still in high school is a good place to start. Similar opportunities may be available when they begin college.
“Encourage your children to save. This could be an amazing opportunity for kids to learn the value of saving and the value of working,” Gregg says.
11. Look for ways to get college credit early. Ohio high school students, for example, can earn high school and college credit simultaneously through the state’s College Credit Plus program. It allows them to enroll in both community college and university courses – and it’s free if you attend a college or university. public university in Ohio.
Start earning credits
“For us, this was a real turning point,” Young says. Through the program, one of her sons earned 65 hours of college credit once he graduated from high school. “He had already paid for half of his college,” she adds.
The Young family will be dealing with the financial challenge of multiple college tuition fees for quite some time. To overcome it, Young reminds himself of two things:
“Save and pray”.
Lucy Lazarony is a freelance journalist living in South Florida who writes about personal finance, the arts, and nonprofits. Her writing appears on Next Avenue, Bankrate, MoneyRates.com, MSN, and the National Endowment for Financial Education. Previously you worked as a writer at Bankrate.
This article is reprinted with permission from NextAvenue.org©2024 Twin Cities Public Television, Inc. All rights reserved.
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