Saving for kid’s education? Think of yourself first
MOLINE, Illinois – A child born this year faces a lot of challenges and one that’s not going away is the cost for college.
But it’s the parents of today who are stressing about the educational possibilities of tomorrow and how they’ll pay for them.
One piece of advice: save for yourself.
Charlotte Doyle is six hours old and her parents are already thinking about her future.
“If you don’t think about it now you’re not going to be in a position to make it happen later,” says Adam Doyle, her proud father.
Charlotte hasn’t met them yet, but she also has a five year old brother and a three year old sister. Her parents have a lot of planning to do.
“There’s always a lot of conversations we have to try to make the best decisions,” says Natalie, Charlotte’s mother.
And although Charlotte has only been alive for a quarter of one day, the clock is already ticking for her parents to save for her future.
When is the time you start thinking about this?
Financial planners say college savings plans should always start sooner rather than later. It’s the same advice they’re taking for their own families.
“And I’m looking at, you know, what I paid for my entire education for just one year for my child that is, yeah, that is daunting and scary,” says one financial planner.
Just how daunting?
Charlotte’s college costs could climb at least 2% each year for the next 18-years.
If she chooses the University of Illinois where tuition, room and board now costs $27,006 a year she’ll need $38,708 a year starting in 2034.
Iowa goes from $18,682 to $26,777.
A private school like Augustana climbs from $49,658 to $71,175.
St. Ambrose, which costs $38,739 now, rises to $55,522 in 18 years.
And if you’re heading to Western Illinois University-Quad Cities, tuition room and board is now $18,121. In 2034, with a 3% annual increase, tuition, room and board adds up to $25,973.
“A lot of families walk into the office and have no idea what college is going to cost,” says Western Illinois University-Quad Cities Financial Aid Advisor.
“So there’s a lot of sticker shock.”
Western Illinois University says parents can get ahead of the curve with savings plans, like the popular 529 Plan, that offers tax-free options. And the students themselves need to hunt out extra scholarship and grant dollars while they’re starting their high school years.
“Families think financial aid will cover everything,” says Culvert.
But some financial planners also say something that may surprise you: think of yourself first, and college savings second.
“You really have to face on setting aside for yourself first, not to be selfish, but there’s lots of different things that are available to our kids when it comes time for school,” says another financial planner.
That’s advice Charlotte’s mom and dad are happy to hear.
“We have to try to be as flexible as we can but still have a game plan, still have a goal,” says Adam.
“And we’ll just duck and dodge as we need to to get to where we want to be.”