There’s an old adage in college planning: You can always go to a cheaper school or skip college altogether. But if those two scenarios are not on your radar, then you need to explore three basic money resources: Savings, Cash Flow and Borrowing. Yesterday’s Money: Savings Excluding emergency accounts, most parents have some short-term monies, retirement accounts and home equity they can access. It may not be the best use of the money, especially borrowing from a 401(k), but if there’s no appetite for student loans and other forms of grant money, then that’s where the money is. Keep in mind that some households have assets that they can sell to generate money, so a thorough inventory of personal property could yield some undiscovered assets. Today’s Money: Cash Flow It’s stunning to realize that most Americans operate their finances without a budget. They don’t even have a handle on their monthly cash flow. But if you create a budget, you’ll be able to review your cash flow, i.e. money left over after essential and discretionary spending. Discretionary spending may be curtailed while the children are in school to free up cash flow for college payments. Downsizing your lifestyle to create   Read more…

Four years of college can cost anywhere from $80,000 to $200,000 for one child. Most families are having at least two children so the expenses may double. The average cost of college continues to grow at 7 to 8%, so the numbers are big and always seems to be getting bigger. There are some creative ways to mitigate student debt, which is at an alarming 1.2 trillion dollars in the U.S. Some high schools have partnered with junior colleges to support associate degrees at no cost to mom and dad. So in affect they are graduating from high school and receiving an associate’s degree at the same time at no additional expense. That’s two years of savings on tuition, room and board! Some students enter the military ROTC programs in college or enlist immediately out of college into the service. The government has programs for both scenarios that can greatly reduce college costs. Some students stay home for their first two years and go to their local community college while working a part time job, resulting in a low cost option for those two years. If your child chooses this option he must be sure the community college credits are   Read more…

College planning is fraught with pitfalls and problems that can exasperate any parent or student preparing for college. Often there’s little to no preparation for it until just before freshman year. If college is so important to parents then why do they procrastinate planning for it and exploring the funding options? Watch the interview with college planning expert John McDonough. Parents are experiencing some serious fear in applying for college entry and financial assistance for their children. It may very well be warranted. Often parents make decisions without the assistance of a financial adviser who specializes in college planning. They’re afraid of making mistakes because they don’t have the time to properly investigate all the funding options available or set up a plan with goals in mind. They feel like they may do something to hurt their child’s chances for college admission or not maximize the financial aid available.  Sometimes it’s as simple as missing deadlines. Selecting a major can be a life-impacting decision. There are tests available to help the potential student select a major that best suits them. Keep in mind, however, that this type of testing is an indicator and will not necessarily predict whether or not   Read more…

Why pay for active management when you don’t get it. Most investors want to understand their financial adviser’s role in circumventing losses. Do they understand your pain points? Do they know your risk tolerance? Do they have an exit strategy in place in case the market meltdown occurs again?  You need to vet your financial adviser. Is your adviser licensed to offer all the financial product lines for your money goals and psychological suitability? Many “advisers” are not security and/or fee-based licensed, so that consideration should be part of your hiring criteria. Does your adviser understand product taxation as it affects your overall tax obligation and tax exposure to Social Security benefits? Do they have the tax management skills to keep more of your money in your pocket and away from Uncle Sam? These are just a few of the talking points you’ll need for the interviewing process. But here are a few ideas that can help in the selection process. Go to www.brokercheck.finra.org and your state’s Department of Insurance to review the history of your adviser candidate. These sites may reveal bad behavior that may not fit your trust factor and leaves you feeling uncomfortable. Many advisers and insurance   Read more…