This blog post is in partnership with Protective Life Insurance Company. Protective Life has been helping people secure their financial futures for over 100 years. For more on saving for college, visit their Learning Center.
Real talk. Penn and I had very different experiences paying for college. Penn was blessed to have his grandparents save enough to put the grandkids through school. I took out a low-interest loan which I paid back after I began working. It feels like our kids are growing up in a blink of an eye. And that means college is getting a lot closer. Are we making the right decisions in saving for them? Is it too late to start?
Start Saving Today
We have a savings plan in place for Lola, but we still need to open a college savings account for our son. Don’t judge me. I’ve been busy since he was born. Also, I completely forgot. In our discussion with Greg Patterson (he is a financial advisor to financial advisors who also helped us with Keeping A Budget) he let us know it is never too late to start saving for your kids education. In a segment on our most recent podcast, we discussed the following ways to prepare for college finances:
Open a 529 College Savings Plan. Most states have very high limits of what you can contribute, so even if you’re behind the 8-ball like me, you can catch your kids up. These 529 plans offer tax-free growth and tax-free withdrawals for higher education expenses, making them a great option to save for your kids or grandkids!
Use your high school guidance counselor. Whether you are running out of time or want to make the most of the savings you do have, counselors can help. Their work with college admissions means they can guide you toward grants and scholarships that your child might qualify for. Even if college is a few years away, use their expertise now to know what your child needs to work on.
Review the return-on-investment. Before you decide the best choice is for your child to take out a student loan, review what the return on their investment will be. Researching what the average salary is of their career can help determine what school they choose and the loan amount they can afford. It’s important to have a realistic conversation about that before applying.
In the podcast segment, Greg also walks us through some ways not to save for college, unless you absolutely have to. We also discussed being able to move money from one 529 to another child’s 529 plan to even out the savings if needed. (I love you PC!) We are admittingly bad at money, so talking with Greg has been a huge help. We are learning so much through these segments!
