Paying for Multiple Kids To Go to College
Trying just to AFFORD your kids is one thing, now you have to think about how you can help them afford college as well! What a gift! Most parents want to do everything they can to set their kids up for success (myself included). Here are some things to keep in mind.
1. Understand how much you can help out with
Most parents wonder how much they should help their kids with college and the answer usually is “as much as you can.” I’d rarely recommend parents provide assistance in a way that hurts their own financial progress, so understanding what assets you have available and how much extra room you have in your cash flow is a great place to start.
2. The best time to start saving is when they are born, the second best time is right now.
Beginning a process of regularly contributing your kids' education, through a 529 plan, for example, is ideal when they are born. This allows investments to grow over time. This is not always a reality for some families, as they have less disposable income when they are younger. The natural starting point is…as soon as you’re able. Turning raises or bonuses into opportunities to save, as opposed to increasing your lifestyle is a great strategy.
3. For multiple kids, recognize age differences
If you are paying for multiple kids at the same time (twins for example) it can be easy to conclude you just split it evenly. What about when they are different ages? It is not unfair to contribute more to your older kids, recognizing the expense will arrive sooner, and you will have more time to contribute to the education expenses of your younger child to make up for the difference.
4. Got one starting college this year? Consider these tips
If you are trying to provide assistance to multiple kids without the benefit of having saved for it, help your kids understand the true costs of college. It is not uncommon for schools to provide varying levels of financial aid and going off tuition price alone can be misleading. I've seen situations where a private college with a tuition sticker price of $80k/year was cheaper than the In-state local university for a specific kid. You really never know. It takes some time, but really digging into what you are paying, and what your options are, can save you (and your kids) tens of thousands of dollars in the long run.
If you’re not sure how to make it work amid everything else you are managing, start a conversation with us today. We can help.
