3: Make Yourself a Plan
Much like saving for retirement, saving for college requires much planning. Making a plan is an important step when it comes to saving for college. If you do not make a plan, you may find yourself stuck along the way somewhere.
The first type of plan involves your goals for college and afterwards. To get started on your way or your child's way, you need to ask yourselves these questions:
- What careers am I interested in?
- Do I want to go to a public school or a private school?
- How many years does the field that I am interested in require for college?
- Do I want to stay in-state or should I go to an out-of-state college?
Many children and teenagers cannot answer these questions. Many teenagers still don't have an idea of what they want to become even when they enter college. But if you can answer these questions, then you have made a great start in the planning process and are better prepared for the saving part because you know what you want to do with your life.
Now onto the actual planning involved when it comes to saving. Here are some questions that you should ask yourself:
- How much time do I have until college or my child's college? (Like saving for retirement, starting young is very important. After all, compounding doesn't help much when you start late)
- How much money will college cost overall? (You need to take into consideration expenses for clothing, transportation, food, entertainment, and any other expense that you'll come across as well as tuition and room and board.)
- How much can I save per month? (When saving for college, investing a certain amount per month over a period of time is a great way to develop good investing habits and it will help the amount of money allotted for college grow.)
Ok, now that you've started planning for college, you're ready to start saving. Remember, starting early will help you out tremendously!
Next: Getting Started Early
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