As homeowners and families, there are plenty of large financial decisions we are faced to make. One of the biggest decisions? College. College (and the real cost of college) stare parents in the face of a huge six-figure investment they must be prepared to make.
Often parents realize the cost far too late in the process for traditional college savings. Then when they have to borrow money, it becomes out of necessity instead of making the best financial decisions. So, this begs the question:
With the cost of money being at its lowest level in a lifetime, is now the time to borrow?
You may be saying, “but my son or daughter isn’t ready yet!” They may be a year or two away. That is fair, however there are bigger questions to ask right now:
- What will your finances look like then?
- What will interest rates be?
- Value of your home? Will it be on the high end like today, or will values dip?
- Employment. Could your employment change? Increase or decrease? Loss of employment?
- Counting on a scholarship? Don’t. In fact, due to COVID, universities are slashing scholarships by 40% over the next 5 years.
- My business should be taking off, right? If you are counting on earning the money, that is great! However, what if?
There are questions abound in terms of what your financial status will be in the future. Here is what you do know: you know exactly what it is like today! The ability to refinance a mortgage is better done when there isn’t a sense of urgency — when you are not on a strict timeline.
What is the next big part of the process? The actual cost of college. Fact: most families underestimate the true cost of college by 52%. 52%! That is significant. In our 3-part series, we will break down, by year, what you can expect to pay for college. Then in part 3, we will break down how you can start today in funding that college investment with ease!