Show Me the Money – Keys to Saving for A Child’s Education

1. Show Me the Money –Keys to Saving for A Child’s Education

2. Saving Issues • An advanced education is important • An expensive investment • How much is enough? • Tax breaks • Titling educational savings • Family members/friends chipping in • Competing expenses • You have some advantages

3. Tough Choices for Savings • Your retirement • Your child’s advanced education

4. Tough choices… • Save and invest for your retirement before funding an advanced education • Why? There are many sources of loans for your or your child to borrow from for an education. No one will loan you money for retirement. • Goal – Do both

5. Three of the best reasons for going into debt: • House • Business • Quality education

6. A necessary education • Ability to earn a living and income go hand in hand • Critical that your child complete high school! • Few unskilled jobs today • What used to take a high school education now takes a college degree. What used to take a four year degree now takes a masters.

7. In order to earn a living • College • Two year • Four year • Professional • Graduate • Proprietary school • DeVry • Military • Trade school • Others

8. How much savings is enough? • A $100,000 question! • Higher education costs are rising much faster than the rate of inflation • Public v. private college? (public college grads do just as well) • “Mom, I’ve decided to go to law school” • “Dad, I think I’d like to be a surgeon”

9. Discuss your values… • I know many of your friend’s parents provide their teen with a car, however our higher priority is to help with your education… • I’ll fund half of a public college, in-state education – the rest is up to you… • Get an education to earn a living – not just learning for learning’s sake

10. Discuss your values… • I’ll fund only 4 years of undergraduate education. I’m not interested in funding a 5th year senior. • Your #1 occupation is to be a student and to earn the best grades possible. The money you can get through scholarships and grants will be much greater than what you could save from a part-time job.

11. Saving? Where do I start? • Pay yourself first • Develop the habit • You have the advantage of time • Saving early is better than later • Saving late is better than nothing

12. Finding the money to save • Decide right now if want to do more than give just lip service to saving • Pocket change $2 day • Sign up for only “Plain Jane” cable • Drive a car an extra year or two • Mow your own lawn • Control spending and debt (credit card type spending)

13. How to Fail –You fail when you sacrifice what you want mostfor what you want now

14. As you think about where to save education dollars… • Save it my name or my child’s • Are there tax advantages? • Risk/return

15. Why does it matter who’s name is on the account? • The person that owns it, controls it • Might buy a new red sports car instead of an education • How is it considered for financial aid? • All student’s assets available for education • Only 5 percent of parent’s assets

16. Options • Missouri Savings for Tuition Program (MO$T) • Education IRA • Series EE Savings Bonds • Mutual Funds • Prepaid Tuition • Uniform Gift to Minor’s Act

17. Pay the whole bill or just a part? • Student work a reasonable amount (not too much) • Part-time work • Work study • Grants and scholarships (don’t have to repay) • Student loans

18. Are there others to contribute? • Grandparents • Doting aunt

19. Time is on your side • Start when your children are very young • It is time, not timing, in investments that pays off • Start early rather than late • Control consumer spending and consumer debt