Q: My husband and I have two adopted children who are entering sixth grade this year. We’ve already begun saving for college for them, but would also like to teach them more about saving and preparing for college. Are they too young to have this conversation?
A: With the school year just beginning, this question is very timely. I do not think they’re too young to start to learn about money, budgeting and financial responsibility; the earlier the better, in my opinion. Here are some thoughts to get you started on the college-planning piece.
Getting kids involved in college planning may be an excellent way to teach responsibility to young people — a lesson that could reap benefits well beyond their college years. Children can earn money, learn about sources of financial aid, research potential colleges and take other steps that may relieve their parents of some of the responsibility of college planning.
According to the U.S. Department of Education, the best time to introduce children to college planning is when they are in middle school, typically grades six through eight.
You may want to initiate discussions about college, explaining the importance of developing good study habits and instilling the idea that your family supports higher education.
You may also want to encourage your children to begin thinking about the career they would like to pursue, which is likely to influence their choice of college, as well as to establish a savings account that could be earmarked for education expenses. In addition, you can teach basic lessons about compounding, investing and other money-management issues.
When students are in the latter part of middle school, they can also start planning to make the most of high-school experiences with an eye toward college. Remind your budding scholar that success in high school depends on skills and attitudes that are developed in middle school or earlier. You can help your child plan for college by assisting him or her with developing a realistic budget.
The chart to the right gives a general idea of the average current annual cost of attending a four-year public versus four-year private college.
Match involvement to age, grade level
Young people can assume varying levels of responsibility for college planning depending on their age and interests. Consider the following if you are looking to get a middle- or high-school student involved.
Sixth to eighth grades
• Continue good study habits
• Enhance computer and Internet skills
• Participate in arts activities or sports
• Start saving money
Ninth to 10th grades
• Enroll in college-preparatory classes
• Establish high academic standards
• Research careers that match personal aptitudes
• Learn about college costs
• Identify prospective colleges
• Research financial aid and scholarships
• Set aside money from babysitting, yard work or other odd jobs for college expenses
11th to 12th grades
• Get a part-time job and continue saving for college
• Visit colleges of potential interest
• Take the Scholastic Aptitude Test and/or the ACT® assessment
• Enroll in advanced-placement classes, if available
• Apply to colleges and for financial aid
Of course if you’re not comfortable yourself with the methods for college savings or how much money you’ll likely need when factoring in inflation over a number of years, I encourage you to seek counsel from your financial professional, who can help you develop a strategy for this significant expense. Coordinating college savings with retirement savings and other financial needs is often a delicate balance. But the sooner you begin, typically the better prepared you will be.
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