College Fund Calculator: Formulate a Savings Plan for Your Child (2024)

Financial Planning for College Involves More than Just Saving Money

Having helped three kids through college myself I can tell you that if you really want to properly prepare for your child's post-secondary education, and insure that the funds you have set aside will be sufficient, you need to help them to discover what they want to do when they grow up.

Why? Because if your child is not certain as what to they want to study to become -- by the time they graduate high school -- you can almost bet that it will take them a year or two longer to get their degree.

College Financial Planning Spoiler: When your child spends 6 years getting a 4-year degree!

Or worse, if your child ends up getting a degree for the wrong reasons (because the field pays well, easiest route to a degree, etc.), you could end up paying tens, even hundreds of thousands of dollars for a degree in a field they end up hating.

College Financial Planning Waster: When your child spends 4 years getting a degree they never use!

Therefore, in order to avoid over-paying for college or paying for a degree that is never used, your college financial planning should include helping your child to develop a clear and meaningful career path.

Help Your Child Discover a Work They Will Enjoy

In my opinion, beyond the normal responsibilities that come with raising children, the next most important thing you can do for them is to help them discover a work they will enjoy -- a work that is well suited to their talents, abilities, genuine interests, values, and personality traits.

This involves paying very close attention to things like ...

• What do they seem naturally good at?
• What do others most appreciate them for?
• What school subjects do they excel at without having to be pushed and prodded?
• What types of problems do they most enjoy solving?
• What types of magazines or books do they read without being forced?
• What do they spend their discretionary money on?
• What extra-curricular activities do they enjoy?
• Do they have a favorite hobby?

And remember, you are trying to help your child discover the service they will most enjoy providing to others, not a career that will make you as the parent happiest or proudest.

Form a Solid "Best Livelihood" Hypothesis, Then Help Them Test It

The goal should be to form a solid hypothesis as to what type of job or business your child would most enjoy by the time they enter their last year of high school -- preferably sooner.

Once a solid hypothesis is reached, the next step is to help them find ways to test that hypothesis in the real world -- without making a long term time or money commitment -- such as after-school jobs, micro-business ventures, or volunteering.

If your initial hypothesis proves inconclusive, form another hypothesis and test that one. Repeat this experimentation process until a satisfactory conclusion is reached.

Suggestions for Indecisive College-Age Students

If it turns out that your child ends up graduating high school without a self-actualizing career path in mind, my advice would be to encourage your child in one of the following directions:

1. Enroll in an inexpensive online or local community college so they can work on their general education requirements while they continue their experimentation process.
2. If your child is not interested in college, encourage them to learn a specific trade from a nearby vocational school. This is generally the quickest and most inexpensive route to an income level high enough to maintain the financial freedom to continue their experimentation process.
3. If your child is not interested in any kind of post-secondary schooling, encourage them to seek out entry-level positions in the type of businesses they believe they would be happy owning themselves. Once they find one they truly enjoy, they can always get the necessary schooling in their free time.

Of course, no matter which direction you choose to encourage, you will always want to sell them on managing their finances in such a way as to preserve the financial freedom to follow their dreams.

The bottom line is that while some children are born with obvious talents and abilities (child prodigies), the majority are born with talents that are obscure and therefore require a process of experimentation in order to ferret them out.

Your goal as a parent should be to assist them with that experimentation process throughout their childhoods, and then encourage them to seek inexpensive ways to experiment in the real world instead of paying $25,000 a year (plus interest) to experiment as an unemployed, full-time college student.