Short time to save? Start anyway!
We say all the time that it’s never too early to start saving for college. But please believe us when we also say that it’s never too late! Sure, you’re going to have to make some sacrifices, either to your monthly budget or to your savings goal. But these Do’s and Don’ts will help you make the most of the time you have left.
DON’T take big financial risks. It can be tempting to try to make up for lost time by choosing to invest in something with the potential for big returns. However, the flip side is the potential for big losses. Financial advisers caution that if you’re getting a late start — say, less than five years until enrollment — you should resist temptation and focus more on saving than investing.
DO consider purchasing a Prepaid Plan. While an aggressive investment puts your money at risk, a Florida Prepaid Plan keeps your investment secure. Did you know your Prepaid Plan is guaranteed by the state? What’s more: By locking in tomorrow’s tuition at today’s prices, you can quit worrying about rising tuition prices AND spread out the cost of college over a longer time span.
DO look at ways to cut college costs. You already know that in-state tuition costs less than a private school, and a state college is more affordable yet. Your child will save thousands of dollars by living at home and completing general classes at one of Florida’s 28 state colleges and then transferring to a university. Remember, employers typically look at where students graduate from, not where they start.
A student can save thousands of dollars by living at home and completing general classes at one of Florida’s 28 state colleges and then transferring to a university.
DON’T rule out opening a 529. If you put your money in a savings account, interest you earn will be taxed. Not so for a 529, the popular vehicle for college savings. If you don’t feel like you can purchase a Prepaid Plan at this point, Florida Prepaid does offer 529 plans in which you save what you can, when you can. Consider our age-based options, including funds for your children ages 13-15 (3-5 years to enrollment) and ages 16 and above. (Ten things to know about the 529, here.)
DO ask your child to step up. Counsel your child about the pitfalls of excessive student loans and strategize together about how they can help raise their own funds. Maybe they can apply for more scholarships or save their own paychecks for future college expenses. Another possibility is for your child to take a gap year after high school graduation. Many universities will defer enrollment for a year, giving you and your student more time to work and save.
DON’T delay any longer. You’ve gotten a late start, but that doesn’t mean you shouldn’t do what you can now. After all, every dollar saved today is a dollar that doesn’t have to be borrowed tomorrow.