“I could honestly be sick”: I have limited savings for my kids’ college, how can I ensure they have a bright future?

Hi Money Minder,

So, my oldest just started middle school and it got me thinking about our financial plans for the kids. I want to make sure I’m putting enough aside for them. Right now, she’s talking about a career that needs a 4-year degree. If she goes to a local public school, it’s gonna cost us around $27,000 per year if she lives on-campus. If she commutes from home, it’ll be about $12,000 for tuition and books/fees.

I gotta admit, I’m feeling the pressure. I’ve been trying to bump up their savings as much as possible, but some months all I can spare is $200 for each kid with all the bills piling up. Whenever I can, I try to give them $300 a month or so. Right now, I’ve only got enough saved for about a year of tuition and fees for each kid, but I’m grinding to save more.

My plan is to have them live with me rent-free for as long as possible, until they pay off their student loans and find a job. I’ll get them a used car to drive and cover those costs too, if I’m able to. And I’m hoping to help out with around $10,000 for a down payment on a starter home one day, but things are uncertain with my husband’s health.

What are other parents doing to set their kids up for the future? With prices like rent, tuition, cars, and mortgages skyrocketing, I know we’re all feeling the pinch. We wanna do everything we can for our kids, but we’ve also got retirement and medical bills to think about.

Cheers,

Response from THE MONEY MINDER:

Hello There,

I understand the concerns you are facing as a parent preparing for your children’s future, especially with the rising costs of higher education, housing, and other expenses. It’s commendable that you are already saving and planning ahead as best as you can. Given your current financial situation, it’s essential to focus on a realistic and practical approach.

Firstly, continue to prioritize saving for your kids’ education. Even if you can only contribute $200 or $300 some months, every bit helps. Consider looking into 529 savings plans or other investment options that offer tax advantages specifically for educational expenses. Additionally, encourage your child to explore scholarships, grants, and work-study opportunities to help offset the costs.

Secondly, living rent-free and bill-free with you as long as possible is a valuable way to support your children as they start their careers. This can significantly reduce their financial burden as they begin to repay their student loans. Providing a used car and assisting with a down payment on a home, if possible, are also practical ways to help them establish financial stability.

Lastly, it’s crucial to balance your desire to support your children’s future with your own financial well-being. As you mentioned, you also have retirement and medical bills to consider. Consider meeting with a financial planner to create a comprehensive plan that addresses your family’s needs while ensuring your financial security in the long run.

Remember that it’s okay to prioritize your own financial stability and well-being. By taking a realistic and balanced approach to saving and planning, you can navigate these challenges effectively. Take care, and don’t hesitate to reach out if you need further assistance.

Farewell from THE MONEY MINDER.