Education Fund Planning.
On this page, you will:
- learn the importance of education planning.
- how you can fund your child’s college education.
- How much to save towards your child’s college education fund.
Importance of Education Planning.
For most parents, their children’s college education is the second largest investment they’ll ever make in their lifetime. “The average total tuition, fee, room, and board charges for in-state students at public institutions are $12,796….The average total tuition, fee, room, and board charges at private four-year colleges and universities are $30,367.” (Source: Trends In College Pricing 2006)
Unless you have a fortune to tap on, you’ll have to plan early for your child’s education. The best you can do is to start saving early, no matter how small the amount is.
Funding Your Child’s College Education.
Your child’s college education need not be 100% funded you. There are many ways to come up with money to supplement what you have saved for your child’s college education.
- You could get a private loan. For example, by tapping into your home’s equity by taking out a home loan.
- You could cash out on your investments such as mutual funds, retirement funds and so on.
- Your child could apply for financial aid such as scholarships, education grants and student loans.
- Your child could work, save and contribute towards the initial down payment of the tuition fees.
- Your child could study and work part-time during college.
How Much Should You Save?
- Estimate the college education costs for your child. If you do not know where to start, then you could use the figures $12,796 and $30,367 as quoted by the Trends In College Pricing 2006.
- Then choose a plan from the methods listed above. For example, you will fund 80% of the college education while your child works and contribute the balance 20%.
- Then use an education fund calculator to help find out the amount you need to save starting from now.