“Personal finance is about 10% math and 90% emotion,” describes our guest today and money expert Debbi King. After ending up in bankruptcy, she finally got debt-free and decided nobody else should ever have to go through what happened to her. Using her accounting degree and education degree she became a coach and author to help everyone succeed financially.
“Sadly I see a lot of stress and non-preparation,” laments King.
Parents often have their own struggles and aren’t able to just write a check to pay for college.
College should not be a given! Children need to find out what their passion is and then decide if college is the right path to reach that dream.
To a certain generation, college seems mandatory. It really isn’t anymore.
King suggests asking, “What would I do if I could do it for free?” Use job shadowing and other ways for kids to explore what they think they are interested in. Once they find what their passion is, they need to plan how to achieve it.
“A lot of parents feel guilty and that it is their job to send their kids to college. It isn’t,” says King. It is very important that you don’t ruin your own financial future. Students have a lot more financial options.
Together, you can both work and pay for as much as you can of their educational expenses.
Consider going to community college for the first 2 years and then transferring.
Scholarships are critical if you need to attend a university. Even awards of $100 will add up quickly. Be sure to let your adult student take responsibility and lead the charge for tackling their college expenses.
It has to be your #1 goal to pay down debt quickly. King recommends:
“You don’t want that debt looming over you,” stresses King. If you only pay minimum payments, you could have that debt for 20 years.
King has a few tips on how to have that awkward financial conversation about college with your child:
Money is an area that is still very taboo and private for most people. King’s book “The ABC’s of Personal Finance” is very user friendly and explains everything you need to know to be in command of your own finances from A-Z.
Core Area- True Price of College
In order to estimate how much college will actually cost, families have to figure out:
This will give you what college might actually cost. From there, you have to create a budget of how much to save and what you will need to spend.
Optional Area- Rental Property
A rental property is generally considered an asset.
For example: If you have a 4 family rental worth $400,000 and a mortgage for $300,000 you will use the net value ($100,000) on your financial aid forms.
You can also deduct fix-up costs, realtor fees, and taxes to determine the actual check you would get at closing then use this number (say, $40,000) on your financial aid form.
A rental property is also something you can use to employ your children. If you have your child go and help clean the place every once and awhile, parents can claim that deduction as an expense and students can claim that as income. They might not make enough money to pay taxes and can then save that for college.
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The post THCC116 – Making College Finance Decisions Interview with Debbi King, Author “The ABC’s of Personal Finance” appeared first on Taming The High Cost of College.
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