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Have Kids? Here’s How to Save for College

September 25, 2015

How to Save for College

Brian and Bo are back from FinCon — and they had a blast! The FinCon Expo is a financial media conference, and the Money Guys loved getting to connect with others in the industry along with podcast listeners.

If you came up and started a conversation at the conference, thank you! We love getting to meet listeners and fans, and it means a lot to the entire Money-Guy family to be part of your community.

Didn’t have a chance to meet Bo and Brian in person? You can still connect with us in a variety of ways — and that includes having your own Money Guys! Brian and Bo are fee-only advisors and are currently taking on new clients if you’re interested in personalized, one-on-one wealth management. Be sure to reach out to brian [at] money-guy.com or bo [at] money-guy.com to learn more.

Let’s jump into today’s podcast. In this episode, Brian and Bo cover 5 important areas that you need to think about in discovering how to save for college.

Get Your Money Ducks in a Row

Parents don’t always want to hear it, but the financial truth is that college should not be priority #1. The best gift you can give your kids? Not living in their basement one day. You need to financially care of yourself before looking to help others.

You need an estate plan, the right insurance policies, cash reserves, and retirement. Once those needs. Remember, your children can get student loans. But no one can get a retirement loan.

Determine the Cost

You can use a little vision planning to help you figure out how much college will cost — and you can also utilize all the tools available to you to do a lot of great research. If you want to know how much a university costs, Google it!

When you’re looking at costs, remember to take inflation into account. Some schools are making efforts to curb the rate of inflation on tuition, but this isn’t standard across the board.

Where to Put the Money You Save for College

In general, the best way to save is a 529 plan. But you do have some other options:

  • Series double E savings bonds
  • Educational IRA (also known as Coverdell IRAs)
  • Roth IRAs
  • Pre-paid college plans

Be sure to reach out to a financial advisor to choose the best option for you and your family.

How to Invest These Savings

There are a variety of 529 plans — and in October, Morningstar will drop new rankings on the best plans. They rank funds by 5 Ps: Process, performance, people, parent, and price.

You’ll be prepared to make a smart decision when the new rankings come out after tuning into this episode!

Developing a Backup Plan

You need to have flexibility in your plan. What happens if your kids get scholarships? What happens if your children choose not to go to a traditional 4-year university?

Brian addresses these questions and informs parents of their options should these situations arise for them.

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