What’s More Important than Saving for a Child’s College Education?

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Every generation strives to provide better for their children.

Saving for a child’s college education typically sits high on the list of parent’s goals.

While important, it may not one of the more important goals.

Conventional thought suggests three other milestones that must first be met before saving for college.

First, create an emergency fund.

Nowadays, it seems that most money allocated for college savings is place in 529 Plans. While they provide tax advantages, using the funds for other than post-secondary education expenses comes with a price – income tax, plus a penalty.

By allocating much of your savings to 529 Plans, not only have you ceded control over the money, you may not have enough elsewhere in the event unexpected expenses arise.

An emergency fund or, at the very least, asset liquidity, should be a top financial priority. Such a fund acts as a cushion, helping your family weather the unexpected.

Next, reduce short-term debt.

Save through interest fee reduction.

Create a debt repayment plan that efficiently, systematically reduces debt in a family-favored manner.

Finally, save for retirement.

If you’re not preparing for retirement, you’re placing yourself at risk. Retirement savings must cover a much longer period than the period college savings will need to cover.

Taking care of personal financial needs first may be one of the most selfless actions a parent can take. By addressing your needs first, you may not need to worry about your children supporting you in the future.

It’s funny how conventional thought has us focus on one obstacle at a time, especially when a holistic approach better serves the families with whom we work.

For a college funding solution designed specifically for your family, contact our Professional College Planners to schedule the first meeting of your campaign!

 

 

 

 

 

 

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