[USA] Saving for College Education: 10 Mistakes Parents Make
Saving for College Education is a major challenge not only in the U.S. but also across the world. This blog post will enable you to learn the biggest mistakes parents make about a college education. Make sure you don’t make these.
Ten Mistakes/False Assumptions Parents make about Saving for College Education –
- Not planning to save money regularly for children’s college education, from at least 10-years before the child is scheduled to join a college.
- Not accounting for inflation and the increase in college fees and other expenses right from the beginning.
- Assuming that student loans will take care of the child’s education, while in actuality it cripples the ability of the graduate to make bold work and lifestyle choices, and keeps them in debt for as long as two decades after college.
- Thinking that all courses lead to a job after completion of the college degree. Liberal Arts degrees, for example, do not offer plum jobs like Engineering/Tech related Degrees.
- Paying more for the same degree at a highly rated private institution. Public & Community colleges can give the same education at a much lower cost.
- Depending on scholarships. While these may be the only option for low-income families to get a decent education at a school of their choice, scholarships are often insufficient.
- Thinking that tuition cost is the only major component of a college education. Living expenses often exceed tuition costs for most students.
- Not accounting for textbook costs that can soar up to $1500 to $2000 USD per year, for certain courses.
- Not accounting for high rental expenditure on and nearby campuses. That’s the reason why you should encourage your children to live slightly far away and share their accommodation with friends.
- Thinking that children would manage on their own for food and other essential day-to-day expenses. While this is theoretically feasible, often children skip meals or eat inexpensive & unhealthy fast food. That’s why it’s important to budget for nutritious food, and make sure it’s utilized effectively.
As you can see, there are so many variable costs in your ward’s college education. If you don’t plan for all these costs and save accordingly, trouble is imminent.
But how do you even know how much you ought to set aside for your children’s education every month?
That’s where Pigly’s Education Savings Plan Calculator [click] can be useful.
As shown in the above image,
If you enter your details like Years until College, Current Savings, Annual Income, Type of College, and a few others,
Pigly’s Education Savings Plan Calculator would show results like,
Total Future Tuition Cost, Monthly Deposit Required, Percentage of Annual Income you need to save, etc.
Pigly has many more Financial Calculators that enable you to figure out your finances in a simple and easy to understand way. Don’t forget to check their detailed guides below each Calculator!
This is quite helpful. Because like you said higher education is very expensive and one can’t just depend on loans.
Yes, it’s prudent to plan well ahead.
Destination Infinity
I think it’s all in the student’s hand to do well in this sector apart how much expensive and reputed the colleges are. I believe in long time savings like you said above and this chart will help parents.
Ya, it’s important to decide on the right college and the right course that is not too expensive and at the same time will provide a good return in investment quickly.
Destination Infinity