Should parents be responsible?
If you are a parent, there's a question that has probably crossed your mind: Should you pay for your child to attend college? On one hand, you want your child to learn financial responsibility, and paying for their education will certainly help teach that responsibility. On the other hand, you want your child to enjoy stability as they begin their career, and paying for their education can help give them that stability.
As you can see, there is no clear-cut answer to the question. In most cases, though, the best solution is to contribute to your child's educational expenses, but not to foot the entire bill.
Finding Balance in the In-Between
If you pay for a good portion of your child's education, they will not have to take on a large amount of debt while in school, and they won't have to work 40 hours a week to make ends meet, either. You could leave them responsible for certain expenses or a portion of the cost, which will still give them opportunities to learn how to budget, pay bills, and work hard during their college years.
You could also use the fact that you're paying for a good portion of your child's education to help motivate them. For example, you could stipulate that you'll only keep paying if they maintain about a 3.0 GPA. This will help teach them responsibility in the absence of having to foot the entire bill themselves.
How Much Should You Contribute?
Some parents can contribute more than others, and that's okay. To determine how much you can and should contribute, there are a few steps you should take. First, sit down and look at your budget. How much can you afford to set aside for college savings each month? You may want to give up some non-essentials like vacations and new vehicles to contribute more, but don't sacrifice your health or your retirement to save more for your child's college fund. Obviously, the earlier you start saving, the better.
If you are capable of covering the entire cost of your child's education and are wondering what percentage you should actually contribute, only you can make that determination. If your child is the motivated, responsible type who is going to succeed no matter what, then maybe you do cover 100% of their costs. If you think they need help with financial responsibility, then maybe you cover all but $5,000 a year, so that they are motivated to work over the summer and seek scholarships.
What Is the Best Way To Contribute?
If you have some time before your child starts college, the best way to save for their education is to invest in a 529 plan. This plan allows your investments to grow tax-free as long as you ultimately spend them on tuition and other educational costs. Make monthly contributions, and watch the funds grow.
If your child is entering college shortly, then you can contribute by paying their tuition directly. This way, the money will go straight to the school rather than passing through your child's hands on the way. If you're going to give your child money towards other expenses, like books and housing, consider depositing it in their account at the beginning of the semester. Having to budget and spend it throughout the semester will help teach them valuable money management skills.
Paying for college for your child is a blessing, and there are certainly ways to contribute while still teaching your child financial responsibility and budgeting skills. Whatever amount you can contribute will help reduce their student loan burden and set them up for success.
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