Back to school season is a whirlwind of activity for students and their families. Whether you’ve got elementary-aged children or high schoolers looking ahead to the next step, you’ve probably already considered options for funding the college days to come.
For families with multiple children, this probably means multiple college funds – and that may be a daunting prospect. But with some thoughtful planning, you might find that balancing educational savings for multiple children is more attainable than it seems.
And parents aren’t the only ones who might consider college savings plans. Grandparents who want to contribute to their grandchildren’s educational future certainly need to consider how balancing educational savings for multiple students will impact their financial plans.
Below are some tips that can help you prepare for your children’ or grandchildren’s college savings needs.
Make a Plan
Before you know how much to save for your students’ future educational needs, you need to know what you’d ideally like to set aside for them. Are you prepared to pay full tuition to any school of their choosing?
Saving for college looks different for every family and the most important plan is one that works for your budget. If you want to contribute enough to pay partial tuition at a state college, you will need to set aside less money than if you plan to bankroll every cent of a private four-year education.
Planning for multiple college savings funds doesn’t preclude a generous financial contribution to each of your children’ or grandchildren’s college educations. However, you may need to be prepared to contribute more money at a greater frequency to achieve the savings you desire.
Commit to Saving
Once you know what you want to save, you need to put your plan into action. There are various savings options for parents and grandparents to use when putting funds aside for their students’ future, including the popular 529 Plan. Your financial advisor can help you to determine which plans might be a good fit for your family.
It may be tempting to put your students’ college savings plans to the back burner to be dealt with after you handle regular expenditures and higher priority investments. But if you do that for too long, you’ll begin to fall short of your savings goals.
One of the easiest ways to prioritize college savings is to automate deposits toward your college savings funds. Your financial advisor can help you calculate the amount you need to set aside each month in order to reach your savings goals.
Encourage Academic Success
As your children or grandchildren get closer to college age, their academics will make a greater impact on the amount of family funding they’ll need to get through school. If your students are able to earn scholarships or grants toward their college educations, your piece of the financial puzzle gets smaller.
Encourage your students to pursue academic success by working toward good grades and a high GPA. Help them to study for standardized tests, like the SAT and ACT. Each of these factors will make a difference when it comes time to fill out college applications.
There are, of course, many individual factors to consider when it comes to balancing educational savings for multiple children. If you’re looking at your educational funding options, your CERTIFIED FINANCIAL PLANNER™ can help. Contact Jake Sturgill today for a consultation today!
Prior to investing in a 529 plan investors should consider whether the investor’s or designated beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state’s qualified tuition program. Withdrawals used for qualified expenses are federally tax tree. Tax treatment at the state level may vary. Please consult with your tax advisor before investing.