While it is natural for parents to want to give their children a fat college fund, scraping up the cash can be difficult. Your 401(k) and other retirement plans need to be funded, you may have financed a home and vehicles that have monthly payments and you may even be expected to help your elderly parents with their living or medical expenses. Don’t let all the demands on your money put your children’s college funds on the back burner. Here are four easy ways to make sure education will be the focus in school and not crippling student loan debt.
Make Savings Automatic
Most financial institutions will allow you set up an automatic savings plan. According to your pay schedule, set up automatic withdrawals from your primary checking account to be transferred to your children’s college funds. Start slowly and bump up the amounts when you receive a raise or get a promotion. This will add up quickly.
Spend Half, Save Half
When your children receive money for holidays or birthdays, you may be tempted to let them spend it all on clothes, electronics or other baubles. Instead, save half of any money they receive for college. This will not only pad their accounts, it will demonstrate the adult behavior of saving for what is needed rather than spending on what is wanted. You can also set up a savings account at a local bank or Air Force Federal Credit Union and give family members direct access to deposit money instead of giving cash gifts.
Encourage Entrepreneurship and Work Ethic
Once your kids reach high school, they may begin to show signs of marketable talent. Encourage them to charge for their wares or services and bank all or a portion of the profits for college. For example, your virtuoso son may charge to play the organ at weddings, or your handy daughter may decide to sell her gorgeous crocheted afghans using an online shop. If you live in an area where minors can carry part-time jobs, you may decide to allow your child to work as long as their grades don’t suffer.
Snip Cash Where You Can
Are you stopping every morning for a grande latte when you already own a perfectly good coffee maker? Skim that cash and sock it away for college. Print your bank statement and go line by line, looking for fat to trim. If you are serious about funding your child’s college education, some minor budget cutbacks may be necessary.
Saving up the money to put your children through college can seem daunting. By using these tips, you can prepare your child for the adult world without a five-figure student loan debt hanging over his or her head.