3 Measures Parents Can Take Now to Protect Children from Future Student Loan Debt
If you’re like most parents, you want to protect your children from things that could cause them harm such as illnesses or accidents. But what about financial situations?
According to Forbes, student loan debt is now the second highest consumer debt category, behind mortgage debt and higher than both credit cards and auto loans.
So if you have a child planning to go to college someday, here are three measures you can begin taking today to make sure he or she has a brighter future tomorrow.
1. Share your expectations.
It’s important to talk to your kids about your expectations for college.
Many parents include their children in their financial planning for college as a way of teaching them about the importance of saving for long-term goals or incentivizing academic achievement.
Either way, it’s a good idea to talk to your kids about what you are able to pay for, and what, if anything, they are expected to contribute. That could be as simple as stressing the importance of earning good grades in hopes of securing a scholarship someday or pitching in by working part-time when they become old enough to work.
2. Teach financial literacy.
While only 26 percent of parents feel prepared enough to teach the basics of personal finance, these skills remain critical if children are to become independent and financially stable adults.
You can start early by teaching young children the difference between needs and wants, how money is earned and how to set small savings goals by setting your child up with a piggy bank or a savings account at your local bank.
Many schools even have financial literacy programs or clubs. If your child’s school does not, contact us about bringing the Future Scholar Literacy Program to your school.
3. Open a Future Scholar account.
Last, but certainly not least, is to open a Future Scholar 529 College Savings Plan.
As more than 160,000 people (or families) have already discovered, a Future Scholar plan is a great way to save for your child’s college.
The money you save in your account grows free from federal and South Carolina state income taxes and withdrawals are also tax-free as long as that money is used for qualified expenses. What’s more, if you file a South Carolina tax return, either as a resident or a non-resident, you may be eligible for additional tax advantages.
For more information on Future Scholar or how to get started saving, visit www.FutureScholar.com and start saving today!