Many adults, find it hard to plan for something that may not happen for another few years or decades. For a child, it may be nearly impossible to comprehend the need to worry about something that won’t occur until they are two or three times as old as they are today. However, it is critical that parents find a way to teach their children while saving for college as part of their mandate to prepare them to become independent adults. This is not simply because of the benefits of getting an education, but the process itself is actually beneficial. If you simply plunk the money down when the time comes you will actually not be doing the best thing for your child and he or she may not appreciate the gift that has been bestowed upon them and thus may actually waste much of the opportunity.
Delayed Gratification
Experts have found that the ability to postpone or “delay” gratification is actually one of the key predictors of success. The famous “Marshmallow Test” tested children and found that those who as children were able to wait for the second marshmallow ended up having higher SAT scores, lower levels of substance abuse, lower likelihood of obesity, better responses to stress, better social skills as reported by their parents, and generally better scores in a range of other life measures. (You can see the followup studies here, here, and here.) So by teaching your child this important skill you are actually giving them more than just an education.
Teach Good Money Habits Early
To get a child interested in saving for college, it may be a good idea to start by teaching good overall money habits. This may be done by asking a child to contribute his or her allowance to a stock portfolio or an IRA. It may also be done by putting birthday or Christmas money into a savings account that won’t be touched until your child is 18. In addition to starting an IRA or a savings account, it is important to talk about concepts such as compounding interest. When a child learns that it only takes a few dollars a week to start saving for college and beyond, it may be easier to get him or her motivated to do so.
Teach Good Decision Making Skills
Investigate Colleges or Universities to Attend- If your child is in middle or high school, it may not be too early to start thinking about where he or she will go to college. While there is plenty of time to determine exactly which schools are most appropriate for your child, you can start thinking about private vs. public schools. Start by eliminating something and narrowing the field of possibilities. It may also be a good idea to look into the cost of going to school out-of-state compared to in the child’s home state. Finally, you can compare the cost of community colleges and public or private colleges and universities. By showing your child how much college costs, it may motivate him or her to start saving and working to pay for it now instead of being in debt for 10-20 years afterward.
Online Schools May Be Less Expensive- Another option to consider is online colleges. These are great options for students of all skill levels and propensities. Your child may want to check out online schools instead of a school with a physical campus. One of the benefits is that an online program may cost less when you consider that there is no need to commute to school or buy food there. In some cases, you may not need to buy books as course materials may be made available online. However, financial aid may be limited or offered in lower amounts to students who decide to take classes online. Therefore, it may be up to the child to find a way to pay for that program without looking to a bank or to mom and dad for help. By finding a program that you son or daughter really wants to take part in, it may make them work that much harder to find ways to pay for it.
Point Out the Value of Money
In addition to working and saving college also presents the opportunity to get “free money” in the form of scholarships and grants. Children should be encouraged to seek out grants and scholarships whenever possible to reduce the financial burden. But just because this money is “free” doesn’t mean that you don’t have to work for it. Those who get the most scholarships are those who are bright, talented or just fill out the most applications. You should encourage your child to do the hard work of applying for scholarships in order to reap the financial benefits.
As a parent, you don’t want your kids to struggle financially as adults. By helping them understand and appreciate the need to pay for college before enrolling in school, they may have the money needed to start a family or get married. It may also make it easier to save for retirement or other long-term goals. IN the process of saving they may also learn the benefits of delayed gratification and decision making processes.
