Episode 06 | How to Pay for College When You're Running Out of Time
0:00:00.6 Speaker 1: Welcome to your Wealth Journey podcast, powered by Bradford Financial Center, where we'll only share how small changes equal big results because your wealth journey is our focus.
0:00:14.0 Shallon Weis: Hello everyone, this is Shallon Weis and Jim Tausz, financial planners for Bradford Financial Center. Today we will cover the wealth journey topic of college planning. More specifically, we'll explore the financial strategies for parents and students on how to pay for college, so whether you're a parent listening with us today or a college bound student, we've been discussing how to pre-plan for the financial part of the college journey over the last episodes.
0:00:37.8 Shallon Weis: So throughout this series, we've talked about the various stages of college budgeting. We've covered the early years as parents, saving from the beginning stages with your child, but when we explored in our last episode, the situation where you might not have started saving until your child hit high school, there were some good tips and strategies for parents and students at this stage. And now today we're going to dive into last minute moves. This is when budgeting for college wasn't even on the radar, and your months from your child choosing their desired college, so don't start sweating, you have options, no matter where you are in the college saving or college planning continuum, your student needs to start life off on a good footing. To do that, we recommend organizing and setting up a budget with your student. Stick around with us to the end of this podcast for our five in five segment that covers quick hit solutions for organizing and setting up a budget for college students, and the hard truth for students who didn't save for college is that college is going to look different for you if you don't want to incur loads of debt. Of course, there are loan programs out there for these exact situations, but that comes with a financial burden that you want to make sure your college degree and future career can carry. Today we're going to share some alternative ideas if you're coming into college with little to no savings.
0:01:53.1 Jim Tausz: So now your son or daughter is off to college, this is happening and the conversations and the college visits are really real, but so is reality of college tuition. If you're later to this game, you've got some quick decisions to make and conversations to have with your student, so start here. The reality is, if you haven't started saving for college yet, the get rich quick attempt will be futile. Let me guarantee you that. After 50 years of financial planning, I've never seen anyone beat that one, it's time to talk to your student about expectations. Number one, they will have to be involved in a handful of ways, financial aid, student loans, work study programs, potentially part-time job. Number two, college will look different for them. They might have to consider being a part-time student as they work full-time to pay for school. They might have to take evening classes to be available for day-time job opportunities that pay actually more money. They might consider an apprenticeship program or working full-time for a reputable company that will offer them tuition a reimbursement plan, or starting their education with a local community college can be an affordable and a brilliant way to earn transferable credits and it costs far less than a public university credits would ever cost.
0:03:19.5 Jim Tausz: Number three, be transparent about what you as a parent are willing to provide and define the parameters to your student. This could be sharing costs. We know some families that pay for room and board and their student pays for tuition and books, this way the student is fully vested in their education. When you pay for the credits, you want to work harder to get good grades and not have to retake or actually repay for the credits. You might reimburse costs for only good, great credits. This puts performance on the student and allows you to pay semester by semester, giving you time to build your savings to pay for good the grades. If your student takes out a loan, you might agree to make payments to it while the student is in school. So the final loan balance upon graduation won't be so significant. But be smart, set the threshold for the length of the agreement, this applies to your first four years of college, meaning five years and beyond are their responsibility. You'll give them an incentive to get a degree in four years, period, end of story.
0:04:29.2 Speaker 1: In our last five minutes, we'll bring listeners a round up of five smart ideas they can apply to their own wealth journeys. So let's get started with this episode's five in five.
0:04:40.9 Shallon Weis: So Five ways to set a budget for college students, it can be the difference between graduating with crushing debt and feeling the financial freedom you deserve. So establishing a budget for yourself as a college student is easy, smart, and you can use digital tools to hold you accountable. So the first tip is to set goals. That looks different for everyone, what is your goal, save 5000 a year to put towards student loans? Pay off your car in two years? If you're unsure of what to conquer first, check out our first podcast episodes on budgeting to help prioritize your goals. The second tip is to get your financial house in order, this means assessing your financial situation, categorizing your expenses, crunching the numbers on your savings, spending and expenses, and then setting your budget, you need to review your bank accounts, what do you have available, what is your income what are your monthly expenses, your car payment insurance, phone bill, et cetera, and what's left over every month. After you've subtracted everything from your income, what is left over is your discretionary income.
0:05:41.6 Shallon Weis: Now, what are you going to do with that? How much of it can you expect to save and not spend or where you can make spending cuts or unnecessary expenses, you know, this becomes your budget. Tip three, put it on paper, the first thing we recommend is that our clients put this budget into a spreadsheet, it's an important visualization step to see exactly what your money in and money out looks like. For some it's shocking. Small spends on streaming services, coffee, hair, nails and delivery services, because it all adds up fast and there are a fleeting spends, meaning they are disposable goods, now you have nothing lasting are tangible to show for them. Now that you're seeing these costs or even the calculations of what you have left at the end of the month, you can make room to cut. Tip four, keep accountable, whether you keep this spreadsheet in front of you and update it monthly, or you move it to a handy app like Mint or left to-spend, you'll find that you're tracking your spending, you might even lean on an accountability partner, maybe it's mom or dad or a sibling or a good trusted friend that can check in with you periodically that holds you to the commitment that you've made to stay in budget. And tip five, remove the temptation.
0:06:48.5 Shallon Weis: Now, placing a bill on auto pay can ensure that you don't miss important credit card payments that leave you with high finance and interest rates and leave credit cards at home to keep you from any unplanned spending.
0:07:00.0 Jim Tausz: A certified financial planner can help you plan for the milestones and the goals in your life. Let us help you prepare for your financial journey.
0:07:08.8 Shallon Weis: Our financial advisory team has helped countless families prepare for all the important stages of their lives and still get them to retirement. Bradford Certified Financial planners are well versed in helping clients prepare for this milestone and building college planning into smart financial plans. You can find us on bradfordfinancialcenter.com, or you can in us on Facebook, Instagram. And our address is 215 North Maine and Clarion, Iowa 50525. And our phone number is 515-532-6661, or for our 800 number is 1-800-348-4419.
0:07:45.1 Speaker 1: Thank you all for tuning in to your wealth journey podcast, powered by Bradford financial center. Be sure to tune into our next episode on planning for retirement. We'll explore how you can start building a retirement plan at any age. Securities offered through United planners financial services, member Venva SIPC. Advisory services are offered through Bradford financial center a registered investment advisor. Insurance Services are offered through Bradford insurance. Tax and accounting services are offered through the Bradford tax and accounting network. Bradford Financial Center, Bradford insurance and Bradford tax and accounting network are not affiliated with United planners. Neither Bradford financial center nor United planners provide tax or legal advice. This podcast is for general information and educational purposes only, and not intended to be specific advice for any individual. Consult your financial professional regarding your personal situation, all investing involves risk and there is no guarantee that any strategy will be successful.
