The tab for a four-year education is mind-boggling. But don’t panic: You don’t have to save the entire cost.
Vicki and George Petrides started saving for college shortly after their oldest daughter was born. Now Kaelyn, 18, is starting her second year at Virginia Tech, and her sisters, Laurel, 15, and Anna, 9, aren’t too far behind. “With three children, college expenses are a big number to deal with,” says George. By the time the Petrideses’ daughters finish college, they could face a total tab of $500,000 or more. And the couple have long set their sights on getting all three of their daughters through their undergraduate years without any debt.
Their strategy for this gargantuan task? Start early, make use of all their options and check in periodically with their financial adviser to make sure they’re prioritizing college and retirement savings in a way that makes sense and maximizes tax breaks along the way. They got a head start on building their college kitty shortly after Kaelyn was born thanks to a contribution from Vicki’s grandfather. Since then, the couple have been using a combination of 529 accounts, company stock from Vicki’s job and mutual funds to save for college expenses. They will use their savings—along with scholarships, financial aid and current income—to pay the college bills. Plus, they plan to pay off a home-equity loan by next summer to help free up cash for current college expenses as well as beef up their college fund.
And though the Petrideses hope to keep student loans out of the mix, they expect their daughters to contribute financially to their education. By working during summer and semester breaks, they aim to save several thousand dollars to help pay for textbooks and personal expenses.
HOW MUCH TO SAVE
This story is from the September 2017 edition of Kiplinger's Personal Finance.
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This story is from the September 2017 edition of Kiplinger's Personal Finance.
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