How to Create Your Own Unique College Financial Plan
A College Financial Plan is something that I have seen help out students tremendously when mapping out their path. After a student were to complete the FAFSA, then the school should sit down and go through in detail the financial plan.
However, what about before we even get to that point. What about a high school student that wants to start planning?
I’ve talked and yapped several times and relentlessly about how we must create a College Financial Plan. But I don’t think I’ve stopped for a minute to think about what that plan looks like or how can one create a plan.
So I want to take some time to review what a possible College Financial plan would look like and how can we make one etc.
Three Parts to your College Financial Plan
Yes, the title says “financial” however, there is some other components to the plan and that is the academic side.
Your goals, outlook and growth, and potential schools should all be included in this. In fact per our “What Major Should I Choose” post, we saw how the degree you will choose correlates with your financial situation (Degree ROI).
Here are the things I personally feel need to go into the College Financial Plan:
Your Desired AIM
The first part of your college financial plan is to determine what you AIM will be.
Now I’m not going to lie….this is difficult!
Reasons for the difficulty of this is trying to sit down and think about what you want out of like takes a lot of self-reflection and self-awareness. I even struggle with this to this day!
Here are some questions to ask yourself:
- What do you want to do in life?
- Determine what truly makes you happy?
- What are your academic goals?
- Why do you want to achieve these goals?
- How would you feel is you do not achieve this goal?
The research is essential in determining how much your college tuition will be.
It’s the part that people the miss out on because they don’t take the time.
Once you have narrowed down some areas, you will next need to think about where you will be going to get the education.
Here are the things to include:
- Bang for the buck schools – Conduct a separate search for the schools that offer the best bang for the buck based on what you want to pursue. Open the field for these schools being anywhere as it doesn’t mean you will go to these schools but you just want to see what options are out there. Write down those tuition rates for each of those schools.
- ROI – Take the tuition and based on salary potential figure out what your degree ROI is.
- Self-Education – This is important. In the last episode I stated that I there is so much information thrown at parents and students at once. However, it’s important for us to learn about what we are getting ourselves into so self-education is key! It doesn’t and shouldn’t stop!
- Job outlook and growth – Check out the Bureau of Labor Statistics to see the salaries that your path can potentially make and what the job growth is expected to be.
- Schools that offer what you want – Since you have discovered the areas, then look into 2-3 schools locally and 2-3 either elsewhere in your state or out of state.
Okay so now this is the meat and potatoes section.
Where is the money going to come from? What does that exactly look like?
This about what type of funding will be available to you. Remember that it may be more realistic to chip away slowly at the cost of tuition and have several sources as opposed to one.
Here is what to include:
- What is your budget? – This one is for the parents. What can you currently contribute to your child’s college? This is a real discussion and something that needs to be talked about with your child.
- 529 or other college savings plans – If you don’t have a college savings plan and your child is young I would suggest looking into them for sure.
- Sock Away – Can you save now? Both parents/students? If so what can you sock away. Make sure you are being realistic with what you can save.
- Stocks/previous investments – Do you have any stocks or previous investments? Was their intent to be used for your higher education? If so, please make sure you include them.
- Scholarships – We’ve talked about it. This is where you will need to be efficient and take action. Apply apply apply for as many as you can.
- College Grants – What grants are you eligible for? There are a lot out there that goes unused so please don’t ignore this.
- FAFSA – It’s free remember you should complete it.
- Your own employment/side hustle (Pre and post high school) – How much do you make and how much can you contribute? Will you work a traditional job or will you have a side hustle like selling on eBay or Amazon will in college?
- Financial Advisors – Do you have a trustworthy advisor? If not, it may be a good idea to have one to guide you throughout this journey.
- Embrace – Be okay with the situation and move forward. Do not let this get you down or feel like you cannot pursue your goals.
Take time with this as it’s important.
You can always change it and it’s going to be ever evolving and it’s each academic year it should be updated. Be smart, be realistic, and do your research.
More than 90% of the students out there will not take the time to do this.
For me personally I just cannot imagine having this heavy decision on someone that’s 18-19 years old and then concentrate on the academic piece of your education.
That’s all for now. We would love to hear comments on this and what you think about creating a plan.