I’m Just a Kid! How Can I Save For College?

Adults have been told that they should have begun saving for college costs as soon as you were born! Well, I suggest it’s never too early for a kid to start saving money for his college expenses either. Here are some things you can do:

• Start earning your own money with a part-time or summer job. (Look at my old posts for ideas about how kids can earn money.)
• I’ve talked about how you can divide your money into categories to Save, Spend, Invest and Donate. Set aside a portion of the money you save for college expenses.
• Ask your parents for help opening a college savings account. You might even ask them to consider making a matching contribution each time you deposit your own money from work or gifts.
• When asked for gift ideas, suggest money for your college savings account.

Parents: Evaluate the potential benefits of contributing to tax-advantaged college savings vehicles, such as a 529 plan or a Coverdell Education Savings Account. Read “529 Lesson Plan: High Scores for 529 College Savings Program” to learn more.

What’s It Going To Cost To Go To College?

As most of you know, or should know, the cost of going to college has become very expensive and the costs are increasing every year. If you are going to be responsible for paying all or a portion of your college expenses, the first step is to find out what the actual cost is going to be.


Start by visiting:
• The College Board
• The U.S. Department of Education
• A High School Guidance Counselor

If you are fortunate enough to know that your college expenses will be paid for by your parents or grand-parents, discovering the actual costs will help give you a deeper appreciation for your family's financial sacrifices in order to send you to college.

Parents: There are college investment options to fit almost any investor. No matter how modest or how ample your income, careful planning is the best way to “find” the money for college. The key is to start early and remain consistent. Read “What College Investment Options Do I Have?” to learn more.

What Can You Do To Start Planning For College?

Most likely, your parents have already started saving for your college education. But how have you gotten involved in preparing for college? Working together with your parents to be part of the planning process can be very educational. Although you may not have the same amount of money as your parents do to save for college, there are other ways you can help your family plan for college.

• Maintain good study habits which can help you achieve good grades. Academic scholarships are an excellent source of money to help pay for college.
• Take college preparatory classes in high school and start thinking about possible career choices. What you want to be when you grow up may strongly influence your choice of college. Most colleges prefer to accept students who have taken more than the basic requires for high school graduation.
• Set aside money from part-time jobs to save for college expenses. Tuition is just a part of the cost of going to college. You have to buy books, pay for room and board if you go away to school, travel costs and general living expenses, as well.

Parents: Start talking to your kids about college planning and get them involved with the process. This will help them take ownership of their educational goals. Read “How Can I Save for My Child’s College Education?” to learn more about financial tactics for college planning.

Kids Finance Coach Donates $1,000 to School During Financial Literacy Month

I recently gave a presentation to about 900 high school students at Oaks Christian School. We talked about the basics of money management; including budgeting, responsible spending, charitable giving and investing. The energizing presentation was complete with music, a T-shirt launcher and prize wheel! The students were tremendously engaged and informed, which made for a really exciting time. (Click here if you want to find out how to bring The Kids Finance Coach to your school or group!)

While at the presentation, my team and I awarded a $1,000 check to the non-profit school. According to the school's headmaster, the donation was the first time the school had actually received a donation from one of its speakers. But for those of you who have been following my blog regularly, you know who committed I am to charitable giving as one of the four building blocks of money management: save - spend - donate - invest. What better way to teach those students about giving back, than by showing them how it's done?

How have you been giving back, lately?

Pay Attention, Parents. This One’s for You!

Who are our children’s first teachers? That’s right…parents. April is Financial Literacy Month, so I’m doing what I can to help kids understand and become comfortable with financial concepts. Here’s a list of things YOU can be doing to help teach the valuable skill of money management to your child.
Ten Tips for Teaching Kids about Money

1. It’s never too early to start talking about money with your kids.
2. Don’t make personal finance topics taboo from kids. Talking about money is a learning opportunity. Any discussion is better than silence.
3. Consider giving your kids an allowance. Set expectations about spending, saving and giving to charity.
4. Encourage your kids to make their own money. That way, they connect work to money. Money is a means to an end, not an end in itself.
5. Teach your child to ask, “how can I earn that?”
6. Make sure saving is a habit. Reinforce it. Don’t forget to do it yourself.
7. Don’t say “we can’t afford it”, say “we don’t need that right now.”
8. Keep talking about issues like debt and credit with teenagers, even if they act like they are not listening. Credit/debit cards can feel like plastic funny money.
9. Kids remember and copy parents’ behavior. So model good stewardship of money no matter how much you have. Discuss the basics of budgeting.
10. Think of a financial planner as a resource. Just ask. They can help you talk with your kids about money.

What Does “Invest” Mean?

I talk a lot about dividing your money into 4 categories: SAVE – SPEND – DONATE – INVEST. Investing means using your money to buy something that can make you money when you sell it. You can use your money to buy stocks, bonds, real estate, collectables and more. It is important to remember that in real life, before someone can invest money, they must make sure they are saving enough money to meet their daily, weekly and monthly expenses. Below are a few definitions to help you start learning about investing:

• Investor: Someone who uses their own money in order to make more money in return.
• Interest: Payment in exchange for the use of money over time. For example, you can earn money (interest) by lending your money to a bank. In addition, you pay money (interest) when you borrow money from a bank.
• Stock: A unit of ownership in a company. The value of a stock goes up or down depending on investors guessing about future profits.
• Bond: A contract between an investor and the US Government or agency. The investor agrees to lend money to the government for a set period of time in exchange for interest.
• New York Stock Exchange: The busiest stock exchange, representing more than 3000 companies where millions of stock shares are traded every business day.
• Dow Jones Industrial Average (DJIA): 30 Stocks listed on the New York Stock Exchange. The Dow is used a scorecard to show average stock performance for each trading day.
• Diversification & Asset Allocation: How money is divided up between different types of investments.

Six Simple Steps to a Savings Plan

Build from the ground up with solid foundation!
• STEP SIX - Review Your Progress
Are you on track to reach your goals? How long will it take? Do you need to make any adjustments?
• STEP FIVE - Identify Your Earnings Plan
Will you be getting an allowance? Would you like to get a job? What other income can you expect?
• STEP FOUR - Establish a Savings Vehicle
Do you want to save your money at home? Do you want to open a bank account? Do you want to start a collection?
• STEP THREE - Set Up a Budget
How will you earn money? How much money will you need to reach your goals? How will you divide your money if you are saving for 2 budget items?
• STEP TWO: Set Your Goals
What are your financial goals? What do you WANT and what do you really NEED? What do you need now and what can wait a few months or even a year?
• STEP ONE: Get Educated
Where does money come from? How does a bank earn money? How can you make your money grow in value? What is compound Interest? (Hint: Check this blog’s archives. I’ve answered these questions before.)