Paycheck Chronicles

Dude, How's Your College Savings?


My youngest daughter is a rising high school senior. This is our last year of having a child living at home. It’s a double whammy. We’ll need to make the emotional adjustment that comes with an empty nest and we face looming college costs. We’ve been saving, so I think we’re ready for the financial cost. I’m not so sure about the emotional part.

We’re going to miss having the kids around. However, if we’re feeling sentimental, we can revisit some of the high school-themed movies we watched with them — at age appropriate times. Here are four of my favorites and, if you’re working on the financial end of your preparations, the college savings insights they can yield:

“Fast Times at Ridgemont High” 

Surfer Jeff Spicoli was more interested in partying than excelling in the classroom. But in the end, with a little help from his teacher, he got serious enough to pass. The lesson? Don’t wait until the end of senior year to save and plan for college. Last-minute cramming may have worked for Spicoli, but in real life you’ll want to put a little away each paycheck and, if it’s in your plans, complete the proper forms to transfer Post-9/11 GI Bill benefits early. Don’t wait until it’s too late.

The “Harry Potter” series

I read all the books and saw all the movies just so I could stay in tune with my kids (wink). Truthfully, I enjoyed being transported to a world where you avoid bumper-to-bumper traffic by jumping into a fireplace to shift to a new location. While there are no magic fireplaces in the college savings game, there are cool tools that are nearly magical in terms of tax advantages. Check out the Coverdell Education Savings Account or a 529 college savings plan. They’re not quite flying broomsticks and magic wands, but they’re still pretty nifty.

“10 Things I Hate About You”

I really like this movie; I’ve watched it at least 20 times. Throughout the film, the character Kat champions the idea that you shouldn’t do something just because everyone else does. That certainly holds true for college savings. Don’t spend extravagantly to keep up with the Joneses. Likewise, don’t put off saving just because they can’t be bothered. Build a savings plan and pick a college based on your own financial reality, and like Kat, you may get a happy ending.

“Back to the Future”

Marty McFly goes back in time to 1955, when life was simpler and cheaper — remember that 5-cent cup of coffee he orders? Unfortunately, the cost of a college education is only going to keep rising. According to the College Board’s Trends in Higher Education Series, the cost of tuition, room and board, and other fees for the 2015-2016 school year at a four-year, in-state, public university is $20,000. Even scarier, the same report noted that college costs outpaced general inflation by about 3.4% over the previous 10 years. Those are big numbers, but every financial goal starts with a price tag and a timeline. Do your research and don’t be afraid to be creative in your approach. Kids can live at home or start out at a community college if that’s the best way to do things from a dollars-and-sense standpoint.

Kate's note:  this post was perfect for me this week.  We are deep in the college process here, and it's exhausting and overwhelming. Take JJ's great advice, plan ahead, and at least the financial part of the process will be a little less gruesome.

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