The school year is just about finished in Minnesota. For those of us with kids in High School, our thoughts turn to the college selection process. What do we need to do before school starts? What should we do next? Here are FIVE tips you may find helpful.
ONE - Choose a college that fits academically, socially, AND financially. And a financial fit inherently means that neither the student nor the parents are over-borrowing (see #2).
TWO -- Borrow an amount no greater than the average first-year salary in your chosen field. If total student loan debt is less than your starting salary, you should be able to repay the debt in 10 years or less. For every $10,000 in loans, you take out, it will be roughly a $100/month loan payment
THREE -- Have the college money talk with your child in the sophomore year of HS, not the spring of senior year when they have fallen in love with a school you can’t afford.
FOUR -- Complete the FAFSA, even if you think you make too much money to qualify for need-based financial aid, because you need the FAFSA to access federal loans and it may also unlock merit aid.
FIVE -- Save in the parent’s name, as opposed to the student’s. Assets held by the parent are assessed at a rate 3.5 times less than those held by the student. A parent-owned 529 Plan is treated as a parental asset, even though the child is the beneficiary.
This information is from my friends at College Inside Track. They are good people. We used them with our kids. You might find them a HUGE help in your college planning process.
If you are curious, follow this LINK to set up a time to talk with them for free.
And, if college planning has you wondering about the Big Picture of your overall financial plan. I would be honored to talk about that with you. Follow this LINK to find a time for us to talk.
A great place to start looking for the right advisor is to talk with a couple of CERTIFIED FINANCIAL PLANNER™ professionals.
To find a CFP® professional near you, start your search here.
As you visit with financial planners, I suggest a couple of things to check:
- Is the advisor always the client’s advocate – a fiduciary advisor?
- Is the advisor paid by clients, not financial product manufacturer or distribution network? That would be a fee-only advisor.
These two points help assure that you are working with a professional who is committed to your best interest at all times. It seems sort of obvious to me that a professional would work in this way, but it’s not automatic.
A fiduciary, fee-first, CFP® professional can help you make great retirement income choices and develop a comprehensive financial plan that is driven by your goals and priorities and addresses all aspects of your financial life. With a big-picture approach, you will be better prepared to understand your options at every step along the way.
Yes, I am a CFP® professional. I’m always a fiduciary and I work on a fee basis. And yes, I’m still taking on a few great families to be part of my financial planning practice.
If this article has you thinking about your own circumstances, contact my office at firstname.lastname@example.org. I am always happy to meet with people who are working on their retirement plans. Dunncreek Advisors does not provide legal or tax advice, nor is this article intended to do so.