Preparing for the future

When my son was born, two costs weighed on my mind: childcare and college. Through my work at Everence Financial, I’ve seen a number of ways families handle college costs and have gained knowledge and experience along the way. Here are some ideas for you to prepare.

1. Age 0-5: We get an extra chunk back on our taxes because of the kids, so we funnel our refund into a 529 college savings account. Invested wisely, these once-a-year chunks can grow significantly. We never got used to spending our tax returns, so we also didn’t miss them.
2. Age 6-16: Once they entered school (and we no longer had to pay $800 a month per child for daycare) we started putting about $300 a month for each of them into their 529 savings accounts.
3. Age 16-18: Think about college costs in rough thirds. Save a third of the cost ahead of time, pay for a third out of cash flow (yours and the students’), pay for a third via loans. This approach hedges against the unknown. If your students get scholarships or decide not to go to college, that’s fine – you have not put too much into a 529. You have encouraged them to take ownership of the decision by contributing financially.

My children are now 9 and 12. Do I know what their educational path looks like? Not really. But I know that my family values life-long learning, so we align our use of money with that value. And if I hit a problem or need a partner to help me decide how much we can afford, I know some very helpful planning professionals at Everence Financial.