This post is sponsored by Florida Prepaid, but all opinions are mine alone. In fact, we are customers and I highly recommend everyone with kids start saving for college today!
Have you ever wondered why you should make college savings a priority? Perhaps you have bigger bills to pay or debt to pay off. Maybe you’re saving for a house, or you’re just struggling to get by as it is. No matter what excuse you choose, if you have kids, you should be making college savings a priority.
Why? Because we can’t predict the future, but we can prepare for it.
If you’re a Florida resident, now is the time to prepare. Get $25 off your enrollment fee with Florida Prepaid. Use my code SAVE1718 and click here to learn more and get started today!
A little background
If you’re a regular reader, you know just how important saving for college is to me and my family. In fact, the whole reason I started this blog was because Tom and I were drowning in student loan debt and we wanted to document it. We worked hard to pay off $150,000 worth of debt in 7 years. I hope that with careful planning and savings on our part, our kids will be able to graduate from college debt free.
Why You Should Make College Savings a Priority
The cost of college continues to rise
Did you know that student loan debt has reached $1 trillion among Americans? At this rate it’s only going to get worse for our kids.
The national average for a public university, including room and board, is already well over $10,000. I don’t know about you, but I don’t think I’m going to have that kind of money on hand when the kids graduate high school. This is something that I need 18 years to save.
It’s a safe investment
Depending on which plan you choose, saving for college is a safe investment. For example, with the Florida Prepaid plan, the funds are guaranteed. The money you pay is invested by the state of Florida, however you won’t know if it goes up or down. Instead, you get the amount that you paid and you get to use that money towards college. The perk is that the price of school is locked in. Here’s how Florida Prepaid explains it:
“Our Prepaid Plans allow you to prepay the future cost of college at today’s plan prices. When it comes time for college, we pay the actual price of costs covered by the plan. That means you don’t have to worry about how much costs go up in the future. We figure all that out, and we manage the investing to ensure funds are available for the costs covered. The plan is guaranteed by the State of Florida so you can never lose your investment.”
You can choose the investment option
While a safe investment is always a good idea, I personally love to see my money grow. That’s why we set up both the prepaid and the investment option (529 Plan). We personally put money in the prepaid plan while we use the investment option for family contributions instead of them giving the kids gifts.
With the 529 Plan, the money you put into the account is invested. You are in charge of investing the money instead of giving that power to the state. We personally use a financial planner to manage our investments.
We can’t predict the future
Let me tell you a personal story. I grew up pretty privileged. My dad is a doctor and my parents didn’t see any reason why they wouldn’t be able to pay for college. They had money in savings so they figured I’d be fine.
Two years before I graduated high school, my parents divorced and all the money they had in savings was gone. Luckily I was able to pay for the majority of college through scholarships and grants, but I still had to take out nearly $30,000 in loans.
By setting up a fund solely for your kids, you are protecting that money from stupid mistakes you may make in the future. I don’t know what the future has in store for me, but I do know that my kids will have a good amount of money set aside for their college education no matter what happens to my finances.
The new year is a great time to set financial priorities
Our family sets financial priorities every year. Each year for the last 4 years we’ve made saving for college one of our priorities.
By setting that as a priority it means that we make sure to put money in those account before spending money on extra stuff for the kids. Sure, we love vacations, toys and fun activities, but saving for college comes first.
If you want to find out how to set financial priorities, click here.
Don’t forget to take advantage of my special offer! Use my code SAVE1718 and click here to learn more and get started today!
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