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How to Finance Your Child’s Education

The idea of affording your child’s college education can be overwhelming especially if you haven’t prepared ahead of time. Proper planning coupled with time can considerably lower the financial pressure. Below are some helpful tips as you start preparing for your child’s college education.

Start Early
The sooner you start saving money for your child’s education the better. And because you start early, you can take full advantage of compounding interest. Another advantage of starting early is, the sooner you begin, the less money you will need to save each year leading up to paying for the college education. The pressure of saving for the full cost of a college education is much lower if you have to contribute less to the savings account each year. Start early. Be consistent. And let time work for you.

Find Out How Much You'll Need
According to www.collegeboard.com, the average cost of tuition and fees in 2010 is $7,020 per year for in-state and $11,528 for out-of-state students. These figures however will likely not be the same in 10 years or even 5 years. Historical pricing data provided by the same website said that the average annual percent increase between the 2000-2001 and 2009-2010 school years was an average of 5.2% for private schools and 6.5% for public schools. It is wise to account for this increase today so that you are best prepared by the time your child is ready for college.

Financial Alternatives
If you have not planned financially for your child’s college education, there are some "last minute" ways to generate additional funds. This may involve taking a part time job, borrowing from a 401(k) or applying for financial aid. Some sources of financial aid include the following:

  • Grant
  • Stafford Loans
  • Perkins Loans
  • Loans provided by the college>
  • Work-study programs

 

Being in the best financial position you can be in often times takes a professional approach. At BatesCarter, We are uniquely experienced and trained to assist clients at every stage of growth, helping them reach their goals and build value, now and in the future. Because we know that the financial decisions you make today will shape your future.

Learn more about our accounting services today or simply contact us if you would like to learn more about BatesCarter as a professional CPA firm in Atlanta, GA.