Common Questions About College Funds
There’s no doubt that the cost of attending college can be extremely expensive. The financial figures involved in obtaining a degree are huge, at a time when having a degree is considered to be more important than ever.
As a result, many parents think about their children’s future prospects. While loans and funding options are available for college courses, these can mean your children start their adult life with a huge amount of debt. Therefore, wherever possible, many parents like to set aside money to be used as a college fund when the time comes.
If you have been thinking of the same idea, you may have found yourself wondering some of the common questions parents have about college funds. To provide a little clarity, below, we’ve answered these questions, so you can make an informed decision on the topic.
What if my child doesn’t want to go to college?
This is a common concern for many parents, but it needn’t be a particular worry. College funds are just a method of saving. They have a particular purpose, but there’s nothing to suggest that the money has to be used for this purpose. You can treat a college fund like a standard method of investing; looking for the best deals and browsing Wealthfront reviews to find the right tools to make the most of the funds you invest, and so on and so forth. If your child doesn’t go to college, then that money is still available for whatever purpose they require-- for example, a downpayment on a house.
How much should I save?
Essentially, as much as you can. Tuition fees are expensive, and then there’s the need for living expenses.
How soon do I have to begin saving?
The sooner the better, especially if you are on a limited income. You don’t want to stress your budget today so you can put money aside for a college course in the future. Some couples even choose to start saving for their child’s college education before their children are even conceived, so there’s really no such thing as “too soon” to begin!
What if I can’t save enough?
It’s unlikely the average family will be able to save enough to pay for their child’s education entirely; the costs are simply too high and the restriction such a saving would place on household finances too great.
However, it’s important to try and see a college fund as a form of “every little helps”. Even if you can only save $100, that’s still $100 less than your child will have to fund themselves or take on in terms of debt. So whatever you can save, you can be confident it will make a real difference to your child’s education choices.
College funds are a source of much confusion for some parents, but they should generally be considered an excellent choice for any parent to make. Whether your child chooses to go to college or not, you can still be safe in the knowledge that they will have a nest egg to help them start their adult life in the most advantageous way possible.