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As a parent and a professional, you want to do everything you can for your kids. You want to see them succeed, whether that means helping them get into the best college or getting them through school without financial trouble. But it can be easy for parents to make mistakes when sending their kids off to college. These mistakes could ultimately end up costing them down the road. In this article, we’ll take a look at common mistakes parents make when sending their children off to school.
Not Having a 529 Plan
A 529 plan is a tax-advantaged savings plan that lets you save for your child’s future higher education expenses. You can invest in a 529 plan using after-tax dollars, which means you won’t have to pay taxes if the money is used for qualified educational expenses. How these plans work does vary on your state, but there are plenty of benefits to opening one. Here’s a brief list of benefits of a 529 savings plan:
- You’ll be eligible for tax benefits
- They don’t require a lot of maintenance
- They’re incredibly flexible
- You have a high investment threshold
A 529 plan should be opened while children are still young, so parents can accumulate enough money when the time comes. If you don’t set up this account, there are alternatives. You can take out a low-rate private parent loan, which is when the parent pays for their child’s college education. This requires a lot of trust between you and your child, but as with a 529 plan, you are entitled to benefits.
Photo by Charles DeLoye on Unsplash
Not Taking Your Own Finances into Account
Another mistake parents can make when sending their kids to college is not doing the research. They need to know what options are available and what those options mean for long-term financial health. Some parents may be tempted to borrow from a friend or relative, but it’s important to be cautious with your finances as doing that can lead to trouble down the road. Parents should focus on their own finances first and foremost because they want their children set up for success once college is over.
Underestimating the Costs of Textbooks
While you may be concerned about getting your children started on their degree program, don’t forget to budget for textbooks. Textbooks can cost hundreds of dollars, which people don’t typically think about as they can rely on their vouchers and student loans to cover it. But there may be instances where you need to pay for the books out of pocket, so always keep tabs with your child on their next course.
Not Letting Your Children Make Their Own Choices
If there’s one thing that can turn your child’s college experience into a nightmare, it’s certainly not letting them make their own choices. This is a time where they’re just learning how to be more independent. As tempting as it is to guide your child all the way through, some of the best advice for parents of college students is that you need to let them face life themselves. That doesn’t mean you can’t be a part of the process, but there’s a difference between offering advice and insight and then choosing their entire path in life.