How to Get a Head Start on College Funding & Savings
This article was written in collaboration with Ryan Kaysen, CFP® from Integritas Financial (IF). IF specializes in work with young families who are considering education for their children. While Financial Aid Coach handles the process when students are just a few years away college, IF starts working with parents when they have the child or even while the parents are expecting the future student. At that point we call it education funding strategy.
Getting a head start on education funding
When creating an education funding strategy, IF typically follows a series of steps to help clients and their students achieve their goals. These steps may include the following:
Identify Goals and Objectives: IF helps clients to identify their goals and objectives for funding education. This may include identifying the type of education they want to fund (e.g. private school, college), the amount of funding required, and the timeline for funding.
Assess Current Financial Situation: IF will assess their client's current financial situation, including income, expenses, assets, and liabilities. This information will help them determine how much the client can afford to set aside for education funding.
Estimate Education Costs: IF will estimate the total cost of education, taking into account tuition, fees, books, and living expenses. We must also consider the rate of inflation for education costs and adjust estimates accordingly.
Determine Funding Sources: IF will help their clients identify potential funding sources for education, including savings, scholarships, grants, work-study programs, and student loans. They will also explore tax-advantaged savings options, such as 529 plans or Coverdell Education Savings Accounts. Depending on how far away from the start date of school, IF will collaborate with Financial Aid Coach to make sure we are considering all possible funding sources.
Develop a Savings Plan: Based on the client's goals and financial situation, IF will develop a savings plan to help them achieve their education funding objectives. This may involve setting up automatic contributions to a savings account or investment vehicle.
Monitor Progress: IF will monitor their client's progress towards their education funding goals, making adjustments as necessary. This may involve rebalancing investments or increasing contributions if needed. The education goal itself may even change depending on the wants of the student, parents, or even the education environment. If you start planning while your child is a baby then there is almost 18 years for changes to occur that would impact the plan. Constant review is necessary to ensure our strategy aligns with the client’s goals and objectives.
Overall, financial planners play a critical role in helping their clients achieve their education funding goals. By working closely with clients, assessing their financial situation, and developing a customized savings plan, financial planners can help families fund education while still maintaining their financial stability.