Ask the Piggy Bank: Saving Money on College Costs
As the new school year approaches, many people turn their thoughts toward school costs. And this includes college costs.
Here is a question I received from a reader about college costs:
My oldest daughter will be starting college in three years. What can we do now to prepare for saving money on college costs?
First of all, kudos for thinking ahead. Like many other life expenses, college costs are something that you need to plan and prepare for. Here are three things you can do to prepare for saving money on college costs:
- Research scholarships, and consider steps that can be taken in order to get them.
- Tax advantaged college savings plans like 529 and Coverdell.
- Think about a state university or starting at a community college.
- Consider encouraging your child to get a part-time job.
Encouraging your child to help pay college costs
Especially in these economic times, it is a good idea to have your kids help pay for their own college costs. Not only does it teach them responsibility (in a personal finances capacity), but it can aslo make things a little more affordable for you. Many parents are considering raiding their retirement accounts to help for college, and this — honestly — isn’t a very found decision for your personal finances.
Saving money on my college costs
My parents agreed to help me pay my room and board costs if I took care of my tuition. While I did take out a small amounts of student loans, most of my college costs were covered by scholarships and my “fun stuff” covered by a part-time on-campus job. I thought it worked well as a compromise.
Many parents also make arrangements to split college costs down the middle. There are many other arrangements that can be made in order to help pay college costs and save a little money.
How do you plan to help manage college costs for your children?
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4 opinions for Ask the Piggy Bank: Saving Money on College Costs
Jean Murray
Jul 21, 2008 at 2:43 pm
I encourage parents NOT to pay more than half of college costs. It is the child’s investment, not the parents’. More important, you don’t value what you don’t have to work for. My step-son was given a free ride, managed to flunk out his first semester, and took over 6 years to get his degree. If he had had to pay for it himself, he wouldn’t have been so quick to party and ignore the cost.
Don’t bankrupt yourself to pay for their college. They can take many years at a low interest to pay it back. Save the money for your retirement.
Miranda
Jul 21, 2008 at 2:47 pm
Great point, Jean! I agree that kids are far more likely to value their education if they have an active role in paying for it.
Ren Garcia
Jul 21, 2008 at 8:33 pm
Jean makes a good point. Another view is: education is the best inheritance that parents can leave their children, better than any assets. It is not eroded by inflations, cannot be stolen, or wiped out by any disaster.
Miranda
Jul 21, 2008 at 9:23 pm
It is true that education is a good inheritance. My parents left me a desire to learn, and helped me on my way. But I’m also glad that they didn’t jeopardize their retirement or their future on college.
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