A college education can be very expensive, even if you choose a community college. Setting money aside early is the best way to make sure your kids can go to college. The price of education can be crippling if you are not prepared, and if you don’t have it available, you may have to borrow it to get the schooling you want or feel you deserve.
Giving your children the best start in life is a praiseworthy goal, but you need to be ready for the capital outlay needed. The price of textbooks alone can be a debilitating blow to your bank account. American college students have seen an 88 percent increase in the price of study materials in the last decade. The College Board suggest setting aside $1200 a year for books and other materials needed.
Borrowing money is becoming standard practice for many Americans going to collegeA quarter of Americans in 2019 have student loans they have to pay off. That works out to almost 45 million people. The average amount owed is just over $37,000 with monthly repayments of $393.
Before you even consider sending your offspring to college with a student loan, factor in how much they’ll have to earn to be able to pay rent or mortgage, all the other expenses life throws their way, and the repayment of that loan. When we take a look at what the average household spends on housing overall, we get a figure of $18,886 annually. That includes mortgage or rent payments, property taxes, maintenance, utilities, furnishings, and so on. According to the Bureau of Labor Statistics, the typical American household shells out $7,023 annually on food expenses.
So figuring out a budget for life after college is important. You don’t want them to borrow money to get an education that leads to a job that won’t cover their monthly expenses. The last thing you want is for them to start out with a large debt they can’t handle.
Making sure you have your finances squared away before your kids are ready to go to college is the best thing you can do for your future. Get advice from professionals, and then set goals so that you know where you stand.
Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.
To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law.
Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.
These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable-- we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.
David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances. Member FINRA & SIPC