The first topic of discussion is budgeting. Whether you’re planning for daycare, elementary, high school, or college, your first step is to look at your income and your expenses and make a budget. Experts say it’s important to take a look at your output, utility bills, housing, food, and payments you have to make.
Then look at your discretionary expenses, such as going out to eat, purchasing luxury items, or your subscriptions, payments that aren’t so necessary. From there, look at how much you’re bringing in, make a budget, and stay within it. “If education and getting those children either savings for college or at a private school or daycare, whatever that is, you just have to see what you can afford and what you can pull off,” says Elizabeth. She adds, “What you don’t want to do is get yourself in a bind where you’re spending more than you’re making, whether it be for all of your everyday expenses and then incorporating education in there however that fits into your life and then be in the red every year.”
For those preparing for college, the same tips apply. However, planning an open conversation with your student will help. Discussing scholarships, work-study programs, living expenses, and looking at the overall cost of attendance to a college or university, not just the tuition. “That’s going to incorporate textbooks, room and board, other miscellaneous charges that might be incurred because those all factor into the cost of that university. Then look at that college and university and say, is that more affordable than in your means? Or are you going to be taking student loans out?” Paal Goss goes on to say, “If able, start saving early for college; you must start saving early. You can get that tax-deferred growth or tax-free growth depending on how you’re taking those distributions.”
Paal Goss also tells 47 ABC it’s important to talk to your financial planner or consultant. If you’re not great at budgeting, they can help or even use budgeting apps.
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Investors should consider the investment objectives, risks, charges, and expenses associated with 529 plans before investing. More information about 529 plans is available in the issuer’s official statement, which should be read carefully before investing. Also, before investing, consider whether the investor’s or designated beneficiary’s home state offers any state tax or other benefits that are only available for investments in such state’s qualified tuition program. As with other investments, there are generally fees and expenses associated with participation in a 529 savings plan. There is also the risk that the investments may lose money or not perform well enough to cover college costs as anticipated. Elizabeth Paal Goss is a registered representative of Lincoln Financial Advisors Corp.
Securities and advisory services offered through Lincoln Financial Advisors Corp., a broker/dealer (Member SIPC) and registered investment advisor. Insurance offered through Lincoln affiliates and other fine companies. Heritage Financial Consultants is not an affiliate of Lincoln Financial Advisors.