Getting divorced can mean substantial changes to your financial situation and the strategies you use to save for the future. Among the savings that you may need to modify are funds for your children’s college education.
Your new, singular income will need to stretch in many ways to cover day-to-day needs, medical expenses and other financial obligations. Knowing how to save for your children’s college education during this unprecedented time can help you optimize what is available.
While you get on your feet and adjust to life on just one income, you may need to scale back how much money you contribute to your children’s college education fund. Even during a time like this, assess how much you can realistically contribute. Do as much as you can even if it is $10-$20 a quarter.
A 529 plan is an excellent option to consider. According to CNBC, you can build compound interest from the money you contribute to the plan. The funds remain tax-free when used for legitimate educational expenses after your children turn 18. If you and your spouse had a 529 plan for your children prior to your divorce, you may need to adjust ownership of the account depending on who you decide should manage the account in the future.
Your children can also increase their educational opportunities through involvement in school-promoted clubs and groups. Encourage your children to work hard in school and look for ways to expand their experience even during their secondary school years.
A majority of colleges provide an impressive number of scholarships that your children may also consider applying for. Another option they have is to apply for Federal Student Aid using the FAFSA application. If approved, they may receive government grants or loans to help fund their education.