Saving For College - I Am Starting Late, What do I do?
I understand the guilt of not saving for college. For many, paying for college is the status symbol of a good parent. I do not think it is, but many people feel this way.
If you feel guilty because you have not saved for college, don't. If you are worried about what to do since you are starting late, here are some tips. And I am keeping the best one for last.
1. Start a 529
A 529 Plan may not be right for everyone, but it is a good starting point. It offers a tax advantage option to save for college. Even with less time for the money to grow, putting aside a little now will help. With the cost of college, every penny you can have ready to use will be beneficial.
2. Have "The Talk"
It's not comfortable, but asking the grandparents what their intentions are is very important to have a solid college funding plan. You do not have to ask, "How much are you going to give," but you should ask, "Do you have any plans?"
You can frame this conversation around being prepared for financial aid requests. Help from grandparents can be beneficial, but if given through the wrong process, it can be very costly. Just let them know you are not asking for help, but if there is any help coming you want to understand how it will be structured so it can not hurt your chances at financial aid.
3. Have the "Other Talk"
As your children get older and start to think about college, it is essential that they know what is reasonably possible. Have a conversation with them about what funding options they have, and how much will come out of your pocket (and theirs).
You are not saying their dream school is out, what they can afford. This way, as you look for colleges, you will know how much aid will be needed to make any school an option.
To do this, you need to know what resources are available. If you would like help figuring a reasonable college funding plan, I have a quick service that will walk you through determining what you will have available to you.
And now for the biggest tip I can give you...
4. Don't Shop for Schools by Sticker Price
We all know that the price written on the window of a dealership car is not the final price. Same thing with colleges. All colleges give aid. Some grant more aid based on merit and some offer more based on need.
Shopping for schools should be done based on the final price, not the sticker price. So, do not get discouraged by starting late. When you hear the average cost of a four-year in-state school is $80,000-100,000, do not panic. In many cases, it will cost you much less than that.