children and finance Archives - Blakely Financial

Education expenses represent a significant financial commitment that accompanies us throughout our lives. Whether you’re considering having children in the future or you have teens nearing college age, we are here to equip you with essential knowledge and guidance for success in education planning.

Plan Based on Career Development

Work with your children to create a plan based on career development. When it comes to selecting a college, it is crucial to consider schools with programs and styles that align with future goals and aspirations. While small details are important, keep your eyes on the big picture: future success! Research the schools your children are considering and be sure to explore the degree programs each school offers to ensure they are properly equipped to help develop the skills and knowledge needed. The right college can make all the difference!

Private vs Public Universities

When selecting a school, it is important to understand the details of the school and program. Each college or university offers a different price level dependent on many factors including program length, region/state, and type of educational institution.

One of the most significant differences will be whether the school is public or private. Public colleges are mainly government-funded. They tend to have a wider selection of programs, more research opportunities, and a larger student body. Private colleges rely heavily on tuition, fees, donations, and endowments for funding and can be either for-profit or non-profit organizations. They often have more money available for grants and scholarships in addition to federal financial aid.

The following are the estimated average costs of a full year of college at private and public colleges (via LendingTree):

Community college (public, in-state): $4,864
Community college (public, out-of-state): $8,622
Private community college: $15,460
Public two-year (in-district): $17,580
Public four-year (in-state): $25,290
Public four-year (out-of-state): $40,940
Private four-year: $50,900

College Savings Plan

A college savings plan is a crucial piece of the college planning puzzle and the foundation of any successful college financing plan. Think of your savings as a down payment on the total cost of college, similar to a down payment on a large purchase like a car or a home.

Only 33% of families use a college savings plan to save for their child’s education. Whether you’re a new parent or already have children nearing their college years, it’s never too early or late to start saving to give them the best opportunities for success. Setting aside money over a long period of time takes discipline and even sacrifice, but can yield surprisingly positive results when done regularly. Work with a trusted financial advisor to help you navigate the process and create a plan tailored to your own goals and budget.

Financial Aid

Financial aid is a broad term for money used to help pay for college. It can include loans, grants, scholarships, and work-study funds. Ideally, you want to get the most from grants and scholarships to therefore have the least amount of loans possible.

Colleges are the largest source of grant aid, with annual awards based on both need and merit. The federal government has two central grants, the Pell Grant, and the Supplemental Educational Opportunity Grant, which are reserved for those with high financial need. The federal government’s main contribution to financial aid is student loans, both Direct Subsidized and Direct Unsubsidized, which are available to all students regardless of their financial needs.

Many colleges will have a net price calculator available on their website which can be used to estimate how much grant aid a student will receive from the school based on their financial and academic information. Use this to compare your estimated out-of-pocket cost at several schools and factor affordability into your college planning decisions.

College is a significant investment, and understanding the financial aspects from college funding to school selection is crucial. The Blakely Financial team is here to help. Contact us today to get your college planning journey started.

Blakely Financial, Inc. is an independent financial planning and investment management firm that provides clarity, insight, and guidance to help our clients attain their financial goals. Engage with the entire Blakely Financial team at WWW.BLAKELYFINANCIAL.COM to see what other financial tips we can provide towards your financial well-being.

Commonwealth Financial Network® or Blakely Financial does not provide legal or tax advice. You should consult a legal or tax professional regarding your individual situation.

Does a toddler really need to know about money?

As with many financial matters, our team at Blakely Financial believes the best advice is to start early. The sooner children learn financial fundamentals, the more likely they will become informed investors later in life. You never know; you may even benefit from learning alongside your child! If there are areas where you could use a refresher, take the time to review those topics as you approach them with your son or daughter. Remember to always consult with your financial advisor for guidance on investing and saving.

Obviously, a toddler will not understand the importance of a diverse portfolio. There are ways, however, to provide children with skills that will help them make smart financial decisions as they age. The first few years of life are critical for mental development. Toys that incorporate counting, such as building blocks, can help your child develop mathematical skills. Many young kids books also cover important topics like saving, spending, and the value of a dollar.

How can I teach money skills to a young child?

Teaching your child about money doesn’t just mean describing how to create a budget. Forming a positive association with the concept of money is essential to future financial wellness. Be sure you and your partner don’t instill a negative association with money in your child by arguing about finances in front of them. Do not avoid the topic of money altogether, but be careful not to speak in such a way that could cause your child to associate negativity and stress with the concept of money. Your child could develop “money avoidance” tendencies where they resist acknowledging their finances or learning more about budgeting and saving.

Consider using physical cash more often. If your young child only sees things being purchased with a card, they may take longer to understand the concept of money and the value of a dollar!

Another way to indirectly teach a young child about money is to educate them on the difference between wants and needs. When you are very young, it can feel as if you need something that is actually just a want. Be sure to discuss the difference between these terms with your child so that they can learn to categorize the two by themselves. Talk about wants and needs in terms of the consequences they will face if they don’t get to have/do the thing they want or need. This line of thinking will help them prioritize their needs over wants; an essential skill for dealing with money later in life.

How can these skills be expanded as my child grows?

The skills they learn (physical cash, wants vs needs, math) can be applied to their own purchases as they begin to earn and possess their own money. If your child receives money from family members for birthdays or holidays, consider how you will help them use it wisely! Maybe you will offer to hold on to some of the money for them or get them a piggy bank. Try to discuss what they would like to do with the money and make suggestions, but don’t go overboard!

Let them make mistakes. Though it may be tempting to take full control over your child’s money, you need to allow them the freedom to slip up. If, for instance, they immediately spend all of their birthday cash on a video game, they will learn the consequences when they want something else and don’t have any money left over. This is a far more effective lesson than simply being told what to do, so be sure to give your child a reasonable amount of freedom when it comes to spending! By the time they become a teenager, these skills will help them navigate the financial freedom of their first job and beyond.

Engage with the entire Blakely Financial team at WWW.BLAKELYFINANCIAL.COM to see what other specialized advice we can provide towards your financial well-being.

Tag: children and finance

Securing Your Future: Tips for a Successful College Planning Journey