Broker Check

College Financial Planning

So….What is your plan to pay for college?

If you’re a reasonable person you’re probably thinking: “How can I put together a plan to pay for college when I don’t know what school my child will attend?” And “How are you supposed to know what career a 14, 15, 17 year old kid is going to want to pursue?” And without this information how are we as parents/students supposed to do our job? And, of course, this leaves the question of how much I need to save and where I should invest it?

While it is true that we don’t know where our child will apply or even be accepted or what path they will follow in life, we certainly know that the sooner we begin to save for college the easier it will be. So how much will you need to pay for your children’s college education? Where should you invest those funds to provide you with growth for the long term, flexibility to attend the school of their choice and penalty free access just in case an emergency should happen? All of these questions and more should be addressed by your college plan.

College planning consists of three equally important areas: Academic Positioning, Financial Positioning, and the Application Process.

But before you get started we need to talk and that includes your student.

Moms and Dads have their jobs to do, and they are big jobs. But the future college student has their role to play and a responsibility to be engaged. As we get started one of the steps all The Lifestyle of Your Dreams clients with college bound students engage in is where we all get on the same page about what the goal is, who is responsible for what, and why everyone has a job to do. For some clients it is the first time they hear their student’s thoughts on college, the very real stress that kids deal with about planning for the future, and the level of understanding the student has about the investment and sacrifices that may be called for. It is also a time to start articulating dreams and ambitions for the future and to lay the foundations for plans everyone can get behind and motivated to carry out. So the first step to launching a college planning effort is to get everyone engaged and on the same page.

Recipe for disaster:
From time to time I will encounter parent(s) who, for well-intentioned reasons, take the position that the student has no experience, no financial understanding, or the maturity to engage in a process of college planning. They select the schools, write the applications, sometimes even the college essays in an effort to get their child in their idea of the “best” school or program. If you are one of these parents my advice is “STOP!”. At best all you are going to accomplish is to get your student into a school they will come to hate and at which they are utterly unmotivated to succeed. And if you are using student loans to pay for this education you run the risk of having a 20-something son or daughter saddled with big monthly bills for something they will perceive as “your idea.”

Academic Positioning
The very first step in planning for college is to determine what school your student would like to attend and what the academic requirements are to gain admittance. There a plenty of tools out there available to today’s students to help determine which college or university is right for them. They can be found on the web, your high school guidance counselor and college planning advisors to name a few. The key feature to look for in these tools is the ability to map the student’s interests, values, skills and personality to a career and then create a list of potential colleges that will ideally prepare the student for the types of careers the student would be interested in.

Financial Positioning
Once the potential list of schools has been compiled and narrowed down, the total cost of attendance must be determined. The total cost of attendance is then used to develop a financial plan so that when your student is ready for college the funds will be available. There are over 100 strategies available to families with college-bound students that can dramatically reduce a family’s college expense. However, many of these strategies require a proactive approach to your student’s college planning. The sooner you begin the financial planning process, the greater the number of possibilities available to reach the student’s college funding goal.

Application Process
Lastly the application process must begin and follow a very precise path. The student and parents have to make sure the correct forms are filled out properly and by the deadlines set by the schools of choice. These forms must all be filled out accurately, timely and consistently. If not it can delay or even eliminate your financial aid award. In addition to the financial forms that must be completed, the student has a number of activities that they must complete in a timely manner. Students these days have to be very organized to ensure that they cover all their basis. They need to be well prepared to sit for their SATs and AP exams as well as write their college essays and lists of accomplishments. All of this must be completed while the student is still hard at work maintaining their grade point average, class standing and extracurricular activities.

College planning for most families is a very important and expensive part of their financial lives. It impacts all other aspects of a family’s financial health and because of this it is crucial for families to build a strong goal-oriented plan. Unfortunately in today’s information age the amount of information bombarding families from the financial and educational community is overwhelming. Families are being financially pressured from all sides often resulting in a haphazard approach to college and financial planning. This sort of haphazard approach to college planning can cost a family thousands to tens of thousands of dollars in financial aid for their college bound student. In some extreme cases parents have even negatively impacted their own retirement assets for the benefit of their children’s education.

We Can Help
We work with our clients to help them in all stages of the college planning process. Our first step is to determine what their college funding goals are and their current financial situation. With this financial snapshot in hand and goals in mind we begin the process of putting together a plan to reach their college funding targets. We provide tools to help the students determine what careers most closely align with their desires and aspirations. This helps us narrow down the the field of colleges and determine a target cost of attendance. Now the planning begins. We work with our clients to assist them in building an academic plan as well as a financial plan to reach their college funding goal. We also have access to a really powerful online tool to help the student navigate the application process.

Ideally, the sooner a family begins the process of planning their children’s college education the easier it is to reach their desired goals. So if you are ready to get started today, contact us to set up a free no obligation consultation.

You Got Them Into College Now How Do You Get Them Out of Your Wallet?
As part of our ongoing planning and preparation services we will arrange to sit down with your student in their Junior Year to start the process of transitioning from college kid to employed adult. We will lay out a program to develop a career plan including career assessment, informational interviews, and activities to have your student know and plan for the days after graduation. After graduation we will also be available to sit down with your son or daughter to talk about the realities of budgeting, taxes, and getting a head start on planning for the future.

When To Start Planning For College?
Some gurus and TV commercials will have you frantic about college planning in the first semester of your pregnancy. Or on the ride home from the first day of kindergarten. The truth is the date to start planning varies from family to family. To help you we’ve prepared a white paper that will help you to organize and prioritize information and resources to get families ready for the college years. In this paper you will find…… To get our white paper: Getting Ready For College please click on the link below. As with all the materials we make available we will never share your contact information or contact you unless requested.

Have a Question?

Thank you!