Whether going to college to earn an Associate’s degree, Bachelor’s degree, Master’s degree, or something higher, one of the most important things you could do is create a solid working budget. One of the most common mistakes that people make is not having a good financial plan. In fact, before choosing any school, financial planning for a college education should always be the first step. With this, you would have a clear understanding of every dime being spent. Not only would this prove beneficial while in school, it would also help you choose the right college or university.
One of the first steps when it comes to financial planning for a college education is to start saving. Although this can be challenging, if you can start saving money in high school or even a year or two after graduating but prior to attending college, it would be helpful. More than likely, you will need some type of financial aid, perhaps in the form of government grants, scholarships, loans, or even private money but any amount of money saved means less needed to complete your college education.
As a part of financial planning for a college education, we strongly suggest you research scholarships. Keep in mind that along with the scholarships everyone knows about, literally hundreds of lesser known opportunities exist. For instance, there are scholarships for people who are tall, overweight, left-handed, and more. Money for college is available and to find it, you simply need to conduct a little research. Obviously, the more scholarship money you can secure the less it would cost you to earn a college degree. Remember, you can secure more than one scholarship for college so look at all options.
Next, spend time researching several schools of interest. You need to talk to a school counselor, someone in financial aid, or a staff member in admissions. The goal would be to identify the cost of the college or university regarding tuition but also books, lab time, room, board, parking, organizations, supplies, and more. Having the full financial picture is what makes it possible to plan. Without numbers, you would merely be guessing. While this process takes time, it is absolutely imperative.
As a part of financial planning for a college education you also want to consider tax benefits. For both parents and students who pay some or all of the cost of college there are a number of tax benefits. One example is the Lifetime Earning Credit. To determine all the different benefits you should meet with a financial advisor, tax preparer, or CPA. For this, you want a professional who knows about hidden tax benefits, someone who can find the most savings. For instance, if you pay for the first year of college, you would save around $2,000 specific to income tax. In addition, that money would then be available to use for your second year of school.
Finally, it would be important to consider all financial aid options when creating a financial plan for college. Usually, sitting down with someone in the financial aid office of the college or university of choice would be helpful. The reason is that there are hundreds of programs available, some private, some public, and some through government assistance. Unfortunately, it is common for many of these options to be overlooked or misunderstood. However, to create a solid financial plan, you need to know all your options for aid.