How do you plan to start saving for your child’s college or higher education? There are unlimited options such as paying for it all yourself, partial payment, student loans, the list goes on. One method our Budget Buddies like to tell parents or guardians looking for guidance on this matter is the 1/3, 1/3, 1/3 savings method.
This method is easily adjustable, and it helps teaches your child the value of setting a budget, planning ahead, valuing money, saving for the future, and so many more life lessons that are easier to learn now rather than later.
1/3 – Parent or Guardian
The parent or guardian will cover the first third of college costs. This can be saved up over the years, paid as cost accrue, or however, payment needs to be taken care of. It is always great to start saving as soon as possible for a college education and keep in mind that education costs will rise over the years.
1/3 – Child
The child will handle the second, third payment. Then, of course, they can start saving as soon as possible, but it’s a little unrealistic for them to have enough to cover the funds needed before college. But there are always part-time opportunities and even on-campus work where they could make the cash needed for monthly expenses and paying off debt.
1/3 – Loans and Scholarships
The last and final third payment should combine both loans and scholarships the child can obtain. This is dependent on many factors, and hopefully, your child can qualify for money they do not need to pay back for school. This area can also include any pre-college savings the child can find, such as taking college credit classes in high school.
Customizing your Plan
The percentage of each category can be changed to match your family dynamic. For example, perhaps the family wants to depend more on scholarships and loans, or the child will be expected to pay the majority of the costs. For more tips or help creating a college saving budget, meet with one of our many Budget Buddies today. Best of all, it is at no cost for members.