My sweet, sweet daughter just turned “I know it all” 13. What a fun age! She is past the age of thinking money grows on trees and that you can buy anything with a plastic card, but does she know how to stay debt free? This is a very important topic to discuss with teenagers, especially when it comes to planning and saving for college.
Let’s start with savings.
If you haven’t already heard, Utah has an exceptional savings plan called the Utah Educational Savings Plan (UESP). UESP is the 529 savings plan for Utah and has been ranked number one in the country by Morningstar, Inc., October 2011 and Money magazine, May 2011. To find out more about this wonderful savings plan, go to UESP.org.
How about allowance?
My daughter and I made a choice together to put the majority of her weekly allowance into a savings account for college. I would suggest to anyone interested in starting a savings account to begin this in Kindergarten and as the child gets older, allowance should increase (if said child is behaving!), which means more towards savings. For example, let’s say your child began saving $2.50 a week, beginning in Kindergarten. The interest rate on the savings account is .90%. If the weekly amount never changed, your child would have saved approximately $1,900.00 for college. Imagine if the allowance increased and you added birthday and holiday money to the account as well. Some may think that this isn’t a huge amount saved, but it will at least help to buy books! Anything saved today is money you or your child won’t have to borrow tomorrow.
How about scholarships?
“My daughter is only 13, so I don’t need to worry about scholarships until she enters high school.” False!
There are scholarships available for students 13 years old and younger. What would you say if I told you that there is a $25,000 scholarship for submitting the most creative peanut butter sandwich recipe? It’s true! The scholarship is sponsored by Smuckers. To find out more go to www.jif.com.
For more scholarships, you can also check out http://www.dosomething.org/scholarships. Not only can you apply for and possibly win free money for college, you can also promote awareness of anti-bullying and anti-teen pregnancy!
Planning ahead is essential not only in saving for college, but in preparing for college as well. Being prepared instead of waiting until the last minute, may save you a ton money you may have otherwise had to borrow. The Department of Education has several publications that are excellent resources for getting ready for college. You can access their information at www.FederalStudentAid.ed.gov/pubs.
One thing my daughter knows for sure is not to take out student loans unless they are absolutely, 100% necessary. Student loans can add up quickly and you are obligated to pay them back, so be sure to borrow wisely!
What does all of this mean for teenagers and their parents? Let’s get it started (me singing in my very best Black Eyed Peas voice)! Begin to save early and find scholarships. If you find scholarships that you are interested in but are not able to apply for because of your age, create a list and keep track of them. You can always refer back to them and apply for the scholarships as you become eligible. The last piece of advice that my daughter is tired of hearing, “Don’t use credit cards to pay for college”!
Best of luck in planning and preparing for college!