If you have a son or daughter who is reaching that age when they start formulating a desire to go off to university, you have probably already felt your mind jump ahead to the awful practicalities of just how you are going to afford to send them there in this day and age. Figuring out how to send a kid (let alone two or three kids) off to college or university is somewhat of a modern day horror story – a cautionary fable today’s baby-boomers will tell their grandchildren to do whatever is necessary to avoid having them suffer through similar experiences
Contacting a financial advisor may be a good first step in understanding just how you should go about putting away money for your son or daughter’s college education. A good financial advisor will look at your portfolio and recommend changes and investments that can be made in order to maximize the potential of the marketplace and ever-changing economy. He can tell you whether or not you should take some of the money you are putting into your IRA or some other savings account, and place it in a mutual fund that will ensure faster growth so that by the time you actually come around to having to foot the bill for college, the burden will be lighter. Also, he may recommend the possibility that, if you are in dire financial need, your child should apply for a student loan.
If you do apply for a student loan, as a parent, the payments on it will begin right away, but you are allowed a much higher limit to the amount you can borrow than if your son or daughter applied for the loan by themselves. At least, this is the case with federal loans. If you get a private student loan, most often you will be able to get a much bigger loan, and the payments on it will not have to be made until after graduation, but the interest will tend to accrue right away. What this means is that you will have to decide whether or not you will be able to pay off a student loan in one big payment (as opposed to making regular smaller payment), or whether the best solution is for your child to save up independently in order to pay it off upon graduation. A good financial advisor will be able to gauge what the best plan is for you in your current financial position, and he will also be able to forecast fluctuations in the economy so that you can make investments that will pay off in the short to medium term.
After all, when you are saving for your son or daughter’s college education it is not the same as saving for your retirement. You have to invest in somewhat riskier ventures in order to make sure that you generate enough of a profit to reach your goals in a relatively short period of time. The expertise of a financial advisor can be of great help to you and your family, so that you can go on about your life without writing that cautionary tale in your mind for future generations.