We all know about the costs of education for our kids. It’s one of the major factors that is used to calculate the total costs of raising a child, and most parents are well-accustomed to saving for our kids’ college education since before they even entered first grade.
There will be a time when all of the preparation and savings have to be put to use. Your child is a teenager, the college offers are on the table, and it’s time to start considering financial matters that once appeared to be abstract as genuine matters of concern. If you’re nervous about going through this process, here’s a step-by-step guide to college finances that all Dads can rely on…
Step One: Assess your savings
If you have been saving towards a college fund for your child, now is the time to check the amount and see what’s available. The chances are that even the most diligent savers will need their child to take on extra financial help to see them through their course; a college education is extremely expensive, and few parents are able to set aside the total cost — plus living expenses! — even with a full 18 years to save.
If there’s a shortfall between what you have saved and what your child will actually need to attend college, then move on to…
Step Two: Considering all loan options
If your child is going to be in need of extra financial support, your next step is to begin to look at the options available. Your first stop should be loans; these can be provided by a variety of different sources, and it’s worth investigating them all. Look into standard federal options, but don’t forget to check out the likes of CommonBond student loans as well. It’s vital that you look at every possible source before you forge ahead and advise your child on where they should borrow from.
Step Three: Think about living costs
Many student loans will include an allowance for living expenses, but many students find that they wish to “top up” this amount to ensure they are able to live comfortably during their time at college. As a result, a large percentage of students in higher education are also in employment. As a parent, you may find the idea of your child having to work their way through college rather concerning— after all, in an ideal world, they would be able to just focus 100% on their studies.
You have two options to consider here. If your finances allow, you can send them loan top-up money each month to pay for little luxuries. Alternatively, you can put your own money-savvy to good use and teach your child a few tips and tricks on how they can make more money without needing to enter into formal employment. This kind of information is great for students, and can ensure that they still have all the time they need to focus on their studies, while still being able to treat themselves every now and again.
After the three steps above, you should be able to be satisfied that your child is — financially, at least — prepared for everything that attending college may bring.