Each month Todd B, sits down with our friends at JP Morgan Chase to talk about finances. For the month of February, the focus is getting your kids ready for college and making them more financially aware of those cost.
With just a few months until the end of the school, most parents are beginning to ask themselves, “How are they going to pay for college?” Todd B. sat down again with Angie Royster, Marketing Director with JPMorgan Chase. The average cost of in-state college tuition is $25,000 per year. and out of state is $45,000 per year, and the average cost of a private college/university is $54,000 per year. Angie explained that the cost of college is continuing to rise and financial institutions expect to see the cost of college triple in the next 18 years.
Angie explained that it is never to early to begin saving for your child’s college education. 40% of parents with children under the age of 18 haven’t started saving for their children’s education and its not that they don’t want to, they just don’t know where to begin. Angie explains that a good rule of thumb is multiply $2,000 by your child’s age or equivalently save $2,000 a year. When you break that down, it equates to about $5 a day. Skipping that cup of Starbucks every morning can get you one step closer to your savings goals.
The conversations can begin at home as soon as your children are born. Ms. Royster explained that another way to maintain “Out of Sight…Out of Mind Savings” is to set up your child a 529 Savings Plan. It’s a state sponsored program that allows the savings to grow tax free. You can set it up as soon as your son or daughter is born, set up a reoccurring contribution and boom, you’re done.
For the older kids, just remind them about scholarships, and grant money. There is lots of free money out there. The Department of Labor has a tool called the Scholarship Finder where students can find and apply for as many scholarships as you can.