Most parents hope to create wealth to benefit their children. They dream of helping their children become successful, so they can pass prosperity on to the next generation, the grandkids, and so on. Unfortunately, today’s economy and the increasing burden of student debt may shrink or erase any legacy parents might create for their kids.
After hearing all the benefits of college savings, the most common question we hear from parents is:
“But what happens with my money if my child doesn’t go to college?”
Parents often mistakenly think their money will just “disappear” or will be difficult to reclaim if their child decides to become a dancer, sportsman, or a millennial Instagram influencer instead of going to college.
We want to clear this up–this is wrong! Your money will not disappear. Your money is always yours and is always accessible.
Let’s assume that your child decides that he or she wants to become the next Kylie Jenner and Instagram their way to fame and fortune rather than go to UCLA to study chemical engineering.
What are your options?
Parenthood significantly changes our lifestyle. This change begins the minute the pregnancy test is positive, which puts us in total shock and happiness, and continues to the moment when the child heads off to university. As parents, we have invested nearly two decades of our time, money, and love into this young person. It’s easy to feel disoriented when suddenly our back seat is empty and our child is in a whole new place. At the beginning, the sense of loss can feel unbearable but, after some time we can proudly enjoy it.
I remember when my neighbor Emma sent her son Leo to college. She told me, “Finally, we’re empty nesters! Now it’s all about my marriage, friendships, work, hobbies, and passions! It’s about what we’re going to do with the rest of our lives.”
College costs hit a record high back in 2016, and it’s only gotten worse ever since then.
Needless to say, college is getting more and more expensive every year, and there’s no signs of stopping. The good news is, parents have multiple options and more than enough time to get ready to afford college for when their kids come of age.
In this day and age, education is one of the most important things in life of any individual. You can hear a lot of people saying that, but why is that the case? There has to be something to it if everyone keeps saying it. For parents with kids, education is one of those topics that has to be discussed as early as possible – and for a good reason, too. Here at U-Nest, we believe education is the cornerstone of great, fulfilling life.
As parents, it is our duty to provide our kids with the best option when it comes to education – and here is why:
A lot of people swear by their grandma’s secret chocolate chip cookie recipe – flour, butter, sugar, chocolate chips, and love – those ingredients combined somehow make the best cookies on the planet. That coupled with birthday cards and holidays at grandma’s and grandpa’s create some fantastic memories. In all, grandparents seem to be a constant fountain of gifts, hugs, kisses and love.
While most families associate 529 plans with college or university, few know that they can now be used for K-12 private education. The new tax law passed by Congress last year included a provision in which parents are now allowed to pay for private school education from kindergarten to twelfth grade. Under the new law, families can withdraw $10,000 per student per year to pay for tuition expenses at private elementary schools, high schools and parochial schools. Keep in mind though, the law only covers private institutions and only applies to tuition costs – it excludes things like books, laptops, or other expenses often covered by 529 plans.
If you’re a typical parent, it’s likely you’ve never heard of the Michigan Education Trust (MET) but it spearheaded the 529 plan movement. Proposed in 1986, this program was intended to “help parents guarantee their children the opportunity of a Michigan college education.” This new fund afforded parents the option to pay a nominal stipulated amount in return for the state agreeing to pay tuition at any Michigan public college.
American students collectively carry more than $1.5 trillion in student loan debt while college expenses continue to rise rapidly every year. Many parents suffer the fate of witnessing their children graduate amid crippling debt. What steps can be taken to prevent this?