College Preparation & Planning

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Wednesday, March 6, 2013

Secrets to College SAVINGS

-- Article by Maria Masters and Greg Mably Family Circle, March 2013 issue College Saving Secrets

These days, it's probably a toss-up who's more nervous about college: you or your child.

Graduates leave school with an average of $26,600 in debt -- but you don't have to leverage your 401(k) if you want to contribute. All it takes is a little planning and help from your teen to cut costs and minimize loan payments. Do Prep Work Assess your retirement savings. Invest in yourself first: Start putting money into a 401(k) or Roth IRA before contributing to your child's college bills. "You can't take out a loan for your retirement," says Carol Stack, coauthor of The Financial Aid Handbook. "And you don't want to end up relying on your kids to support you."

Use an online calculator like the one at troweprice.com/ric to find out how much you should be setting aside each month. By keeping your savings goals on track, you may have more leeway to fund your child's education. Discuss your contribution. It's not easy to talk about finances with your children, says Stack, but if your teen is counting on you to help pay for school, she has to know whether and how much you plan to give each year. Read more...

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