When you think about sending your kids to college, you might feel one of two ways. The first one is a feeling of contentment knowing you’ve been saving since they were born. The second way could be one of fear, especially if you’re not sure how you’re going to help them make ends meet. If you happen to fall into the second category, all hope isn’t lost. There are things you can do to help your child attend college without going broke. From creating a stricter budget to looking into loans, below are financial strategies you can implement today.
Open a 529 Savings Account
Depending how much time you have before your child goes off to college, you could open a 529 savings account. This type of account allows for high contribution amounts, so you can stockpile as much money as possible. This type of account also allows your money to grow faster than traditional saving accounts. When your child does go to college, you can withdraw the money and use it for their educational expenses.
Look to Loan Products
If you’re interested in getting a loan, you have a few options. You can inquire at your local bank or credit union, or you could apply for Earnest parent loans for college. With these types of loans, you will likely need a solid credit score, have a verifiable credit history, and have a positive history of paying back debt. In addition, your child may need to be at least a part-time student.
Rework Your Budget
If you’re guilty of spending too much on things you don’t really need, now’s the time to stop. In fact, you might be surprised how money you’ve been spending without having anything to show for it. If you usually wing it at the grocery store, make a list instead and stick to it. Allow yourself one or two splurges a month to avoid overspending on a whim. It’ll also help you be smart with the family budget if you set additional rules for yourself, like the 50/30/20 rule. This is a budget plan where you put 50 percent of your income toward your necessities, 30 percent towards what you want, and 20 percent to savings.
Tap Into Your Home’s Equity
If you’ve been paying a mortgage for a while, you’ve most likely built up a good amount of equity. Equity is the amount of money you’ve put toward the house. It’s an investment, but the way you tap into it functions more like a credit card. This is known as a home equity line of credit (HELOC) and can be used for many ways, which includes sending your child to college. How HELOCs work is that you’ll receive the amount you’ve currently paid off. So if you have a $300,000 mortgage and you’ve paid $150,000, you’ll be able to use $150,000 of your home’s equity. Make sure to contact your mortgage lender to get an estimate of what you still owe and what you’ve paid off.
