Whether you have one year or 17 years before until the first tuition funding payment is due, avoid these money pits:-
1. Student Loans
Student loans can be a great way to fund a higher education, but they are also one of the worst types of debt for borrowers.
If you’re planning on borrowing for college, you need to really understand these key fundamentals of student loan debt and run the calculation below. This will help you make sure that you know what is coming. The loan bills will start coming whether you have a job or not!
Do some research beyond that – it’s not just going to college that can boost earnings, but it’s also about choosing an appropriate degree.
2. Insurance as Saving Plan
Insurance is a bad way to save for retirement, and it’s even worse way to save for college. Keep your insurance and investment separate. Don’t let the emotional pull of a new baby or a college dread lead you into a bad decision.
3. Investing in Bonds
The cost of tuition at most College goes up 7% every year, but the investment in Bond only earn around 4-6%. So with bonds, you are not even treading water, you are sinking a little deeper every year.
4. Saving too late
Providing for children’s education is a major goal for most people and is a big mistake to start late. Compounding interest and time are a saver’s best friends. The earlier you start the less you need to save-up
Try this calculator:-
College is just like anything else we spend money on. It is not a right for anyone, it is a privilege. Thus, it has to fit reasonably into your financial plan.