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It’s a long haul to get that diploma, but not soon after the celebration new grads are faced with new financial dilemmas that need careful planning. School loans can come due, health insurance benefits may or may not need changing, and in today’s economy a job may not there immediately to save the day. Careful financial planning is in order to keep your spirits high until you can land your first big gig. (more…)
One of the biggest financial worries that plague parents across the land is college tuition. You know it’s coming the first time you see those two pink lines, and it’s reiterated during the first ultrasound. By the time your little one hits high school, it’s all you can think about.
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There are so many costs associated with college, it can be a financially stressful time for many parents and their children. Students seldom realize how much money they need to spend until they begin moving out of home and into a dorm or apartment. Students should realize that not only are they going to need to pay for books and tuition, but for the costs of daily living as well. Luckily, there are several options available to fund their new college life.
College is very expensive and while we can take loans, it is sometimes in the best interest of parents to start saving for their children early on in their lives, but not to overdo it to the point of having to turn to payday loans to live. If we start a modest savings plan early in a child’s life, we can save enough to make sure that the high costs of college are covered. Sometimes it is hard to truly estimate how much we will need for our children when they decide to go to college. We can use calculators to estimate the amount we will need, but it is often best to have our financial advisor help us make the determination. They can often estimate the cost of college for our young children using average inflation rates, current costs and the age of our children to make a good determination about our goals for monthly and yearly savings. Every month, parents should be placing a small percentage of their income in a 529 college savings plan for each child they have to ensure that they are covered and that their education is paid for without them having to resort to loans of any kind.
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Sending your children to college will be expensive, especially if they are only a few years old right now. College tuition is expected to increase in the next several years to the point that it will cost close to double what you spent on your college education. The 529 College Savings Plan is based on state and education institutions. You can elect to go through a state plan or approach an institution you feel your child might go to. The 529 College Savings Plan is designed to help families set money aside for future college expenses.
529 College Savings Plan was established in 1996 and named after section 529 in the IRS code. State plans can work for out of state colleges, which is important. You want to give your child a choice in which college they attend. This means you want to have a plan that does not designate a specific school or state. Most plans are not going to be affected by the state you establish them in. For example, if you live in Colorado and your child wants to go to North Carolina the money should be transferable. There are certain rules that could make the institution ineligible, so you also need to check on that once your child gets closer to college age.
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Students often find several student loans to cover the costs of their schooling. Even the Federal Government will offer more than one loan, throughout a college lifetime. In one instance you might have a Student Finance Loan Corp or ACS loan, whereas the next year it was a direct loan from the Bank of America. No matter where you get all your student loans you have an option of obtaining a lower interest rate if you consolidate them.
There are numerous ways you can consolidate your student loans, but not all of them may work for you. Let’s take a look at how to consolidate them before we examine the lower interest rate.
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The days of college students getting credit cards are gone. New legislation makes it much harder for people under 21 to get a credit card. In order to do so now, the applicant who is under 21 has to have a parent or guardian co-sign the credit card agreement or they must be able to prove they can make the payments. As most of these people are still in school, it’s highly likely they’ll be shut out from obtaining a credit card without their parent’s permission. Where are they going to turn to when they need emergency cash for books, a medical problem, or just for extra cash?
Next to tuition, books are the next most important and expensive item on a college student’s academic list of expenses. Textbooks can range cost hundreds of dollars, and are heavy to cart from one place to another. Many of these books are now available through e-readers, like the Kindle DX, and at much lower cost than in physical format. As college students tend to be early adopters of technology, you will see many of them going for the e-reader instead of buying their textbooks at the college bookstore.
After we graduate from high school, we have decisions to make that will truly affect the rest of our lives. When we commit to either a full-time job, college or even both, we are maturing and need to start to consider our financial realities. In many cases, we are on our own and must take care of our bills on our own, which can be very difficult with a low-paying entry-level job. In many cases, we must find a way to make end meet with limited help from our parents. They sometimes pay for our schooling or help us secure loans to do so, but with current salaries, our parents are often stretched to the limit. We need to find ways to cut corners for our and their financial situation. Fortunately, there are ways to cut corners and spend wisely that will help us get by when we are in college. Making sure we have a budget that lets us know when we will have shortfalls is essential. We can manipulate our spending and know when we can and can’t buy certain items.
If we lived in a perfect world becoming wealthy wouldn’t be hard to do. However, our world isn’t perfect and it takes a little bit of work to become a millionaire. If you have children it is the perfect time to begin amassing a small fortune for them. The best time to start this path to wealth is when they are newborns if at all possible. You don’t have to put a lot of cash away for your child when they are infants, but it should be done on a monthly or even weekly basis. Teaching your children about finances is probably one of the best things you can do, and if they have their own account they can see proof of your teachings.
