Whatever entirely valid misgivings you might have about what happens behind closed doors in elite universities’ admissions departments, one thing is not up for debate: Attending a top-tier four-year college or university is a very expensive prospect — even for relatively well-off families, says award-winning wealth manager Daniella Rand.
If you have multiple kids with Ivy League dreams, you need to act as early as possible to ensure you’ll be in a position to afford them. Here’s what you can do to start off on the right foot today.
- Get in Touch With a Financial Advisor You Can Actually Trust
Start by retaining a financial advisor who speaks your language. While you don’t want a yes-person who’ll stand by as you go astray, your ideal advisor should work with you to help you reach your financial goals.
- Open a 529 Education Savings Plan, Preferably in Your Home State
Open a tax-advantaged 529 education savings plan and begin making regular contributions. Funds held in your plan grow tax-free, provided they’re used for education expenses when the time comes. Your state’s plan may offer state income tax benefits, as well.
- Look Into Other Tax-Advantaged Education Savings Options, Too
Speak to your financial advisor about other tax-advantaged education savings options, such as Coverdell Education Savings Accounts. If you can afford to contribute regularly to multiple funds, your education nest egg will grow that much faster.
- Consider Upping Your Term Life Insurance Benefit
A parent’s untimely death can shatter the best-laid education savings plan. Avoid this worst-case scenario by ensuring that your life insurance benefit can accommodate your kids’ future education expenses.
- Tap Close Relatives for Assistance, If They’re Able
Don’t be afraid to ask close relatives, such as your parents or siblings (especially if they don’t have kids of their own), to open their own education savings accounts in your kids’ names. Anything they can contribute will help.
- Begin Thinking About Scholarship Channels
Many parents dream of full-ride athletic scholarships, but those aren’t realistic for most. Your kids are far more likely to piece together multiple low-dollar scholarships based on merit, interest, or identity. It’s never too early to think about realistic options, and to make sure you’re in a good position to qualify.
What You Do Today Will Define Your Kids’ Tomorrow
If you’re able to take these six steps to shore up your kids’ education fund, you’ll find yourself in rare company. For one reason or another, many parents wait too long to take meaningful action to secure their kids’ future. They learn too late that it’s never too early to begin saving for college — not these days.
At the same time, it’s important to understand that being able to afford the college of one’s choice is not equivalent to attending the college of one’s choice. Parents committed to sending their kids off to elite schools must understand what’s involved in the multi-year run-up to application season, and they must be willing to face a reckoning if and when that comes. Not every child realizes their Ivy League dreams, after all.
For now, the most important thing you can do is work to execute your college savings plan. You’ll need those funds sooner than you might think.