by Lara Nelson
As your child transitions from high school to college, your instinct may be to help them as much as possible, even if it means taking out a loan or remortgaging your house. However, your future financial security should not be compromised to help your child with their college career. While there are many ways to help him or her pay for the new and rather expensive experience of college, it’s important not to lose sight of your personal goals.
If you’ve got some time before your little one heads off to college, you should set up a savings account and begin preparing right now. If you put a little money in each month and on their birthdays (when your child gets so many presents that many just collect dust anyways), your money will quickly begin to grow. By the time your kid heads off to college, you will have a hefty amount saved and ready to help them make it through at least the first year or two.
Rent to Them
If you’ve got some money saved up, but not enough for the kind of college education your child wants, one way to help them is to purchase a house near school and allow your kid to live there. This gives him free housing, and you can increase the benefits for both of you if your child rents out the other rooms and gets to keep whatever rent he makes as income (minus the mortgage payments), if you want to make that their responsibility. While this is in effect taking out a loan to help your child, the low housing prices and interest rates right now could actually help you financially down the road, rather than being the burden of a traditional school loan.
Push Back Moving Out
One of the biggest ways for a new college student to save money is to live at home. While for some students this might not be ideal, it makes things much easier financially. Room and board often costs as much as tuition, so a student living at home and going to a nearby school can help save an astonishing amount, even if it’s just for a year.
Going to college is a big step for your child, but it shouldn’t be one that rests solely on your shoulders or affects your retirement. Help as much as you can, but know that taking out loans and indebting yourself in your later years will do more harm than good, more often than not. Come up with creative ways to save for college, have your student work to get scholarships, and give help that isn’t all about money.
While student loans should be avoided if possible, they are low- or no-interest and are created to be less difficult to pay off than a traditional loan. Have your child participate in the school payments and give him greater independence while teaching him valuable lessons about money-management.
Lara Nelson contributes information for a site which provides advice about cheap mortgage protection insurance. You will also see discussions of Mortgage protection vs life insurance policies are explained in clear detail.