None of us are getting any younger, and you could swear that every time you turn around your child has magically aged; it seems like just yesterday he was taking his first steps and now he’s starting school! The point is time is flying, and your child is going to be heading off for college quicker than you can imagine. If you haven’t set aside a college fund in preparation for this eventuality you could find yourself scraping for money to ensure that he gets the best education (or telling him, you just can’t afford to send him to an Ivy League school because you don’t have the cash).
Reasons for Creating a College Fund for Your Kids
So, if you’ve been meaning to do it for years but it just keeps getting put on the back burner, here are a few good reasons to lite a fire and start up a college fund.
You may think that the price of higher education is astronomical now, but over the course of your child’s maturation to adulthood, it’s bound to go up. Even if you start a savings account the day your baby is born and contribute to it regularly until he’s 18, the rate at which you earn interest isn’t likely to coincide with the rising costs of living. This means you’re already one step behind. So you need to start thinking about how much you can set aside each month and how you’re going to make it work for you.
2. Give investments time to grow.
Even the best investments won’t mature overnight, so if it’s getting to the eleventh hour (your kid is already prepping for the SAT, for example), you might have waited too long. If you don’t want to have to roll the dice at the last minute by putting your little nest egg into high-risk stocks and hoping that they pay off, start investing wisely while your child is still young and continue to invest until it’s time to send him off to the ivory tower.
3. Admission doesn’t equal scholarship
Just because your child receives the honor of an acceptance letter into Harvard or Yale doesn’t mean he’ll get a scholarship to go with it. You want to believe that your child is capable of anything, so put your money where your mouth is. If he ends up at a state school, well, he’ll have some money for a down payment on his first home, too. If he ends up at an Ivy League law school, he can buy you a house.
4. Don’t count on help
Federal financial aid, government grants, and outside scholarships are all great…for the student that is eligible. But if you’re doing well enough to make ends meet, your child may not qualify for some (or all) of these free monies. Keep that in mind if you’re counting on someone else to foot the bill for your child’s college education.
Some parents think the public school system is good enough, while others would rather pay for private institutions. And then there are those that opt for home tuition so they can exercise more control over their child’s education. As a parent, you have options when it comes to educating your kid. Don’t you want him to have just as many choices when it comes to selecting his university of choice? The sooner you start saving, the more money you’ll have in the college fund so that the world can be your high-school grad’s oyster.