Parents are you back in the routine yet?

Parents are you back in the routine yet?

You know the long awaited routine of back to school.

Summer is fun that we cannot deny.
However after 3 long months of summer break I think parents, grandparents and kids alike are ready to get back to school.
I know that even though my kids love summer there is a part of them that also likes the comfort of being back in their school routine, as well as of course getting back to seeing their friends every day and getting back to their school sports.
What does back to school mean to us as Parents?
Well the first thing I think of is back to the crazy business of all the running around that comes with back to school and all of the other activities that my kids participate in after school.
But another thing that back to school represents is that our kids are another year closer to College.
In the same way that you are another year closer to having to fund you kids college.
As the Parent or Grandparent of children how are you planning to help them with their college expenses?
You need to be smart about the costs of putting yourselves at financial risk in doing so.
Do not forget the importance of creating a sound overall financial plan.
What does this mean and how do you go about doing that?

Saving for retirement should still be priority.

Saving for both college education and retirement at the same time can be challenging.  Even though it may seem selfish saving for your retirement should be a priority especially when it comes to you contributing to your 401k or IRA’s.  Most advisors would agree that you should take full advantage of investing into these accounts first, allowing you to make the most of the tax advantages and matching contributions from your employer.  One thing to remember when choosing which one should take priority is that you can take out a loan for college however you cannot take out a loan for your retirement.
The sooner you start to save for college the better.
This one may seem like a no brainer however more often than not we tend to overlook just how much of an impact this will have.  For example let’s just say that you were going to invest $100 per month for 18 years this would yield $48,000 assuming an 8% average annual return.  As you see this can really make an impact on your college savings plan.
Independent 529 savings plans are a great way to save for college.
When you think about it saving for college is difficult because there are so many moving parts involved.  You know it will be a huge expense but it is difficult to predict exactly how much it will cost and then how much if any financial aid you might qualify for.  Independent 529 plans which are offered in most states and can be moved from state to state are more flexible than state prepaid tuition plans as the money can be used at any school and includes room and board.
Maximizing and knowing your financial options.
When the time comes for your child to go to college even after you have saved you may still end up coming short on college funds.  This is when you need to weigh up your options in regards to student loans and financial aid.  When applying for financial aid it is always a good idea to seek advice from someone who can give you advice on maximizing your eligibility.