Financial Planning For College one of the key components of your personal financial plan

Financial Planning for college needs to start as early as possible because the earlier you start the easier it is to reach your college savings goal. This may be a good time to take a look at my Investment Lesson to get some ideas about things that you can do to start saving for college. It’s important that you take advantage of compound interest. See the savings plan lesson to learn about the effect of compound interest on your financial planning for college.

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One of the things I read about to help you with college finances is to purchase a house near your child’s college and rent it out to other college students. Your child will have to be the property manager while he/she is in college which by the way is a great way to teach your child some business skills. The idea behind this strategy is during the four years that your child is in school the other students will pay the mortgage on the property and your child will live rent free saving you the money you would have to pay for board while your child is in school. When your child graduates you can sell the property and get your money back hopefully with some extra money due to the value of the house increasing in four years.

Now you are probably asking how can I purchase a home and pay for college all at the same time. I know I’ve been saving but I need to use the money to pay for college tuition. Again this is a strategy I read about I have not actually experienced it yet because my son doesn’t go to college until next year. The strategy is that you would take the money you have saved and purchase the house. You would borrow the tuition by getting a student loan to pay the tuition. The beauty of this type of loan is you don’t get charged interest or have to make payments until your child graduates. Once they graduate you sell the house and pay the loan off.

Financial planning for college is a key part of your personal financial plan and one of the strategies you may want to consider is to purchase a house and let your child be the property manager. You would borrow the money to pay for the tuition and then pay the loan off when you sell the house. You have to be aware that market conditions have a major impact on this strategy so you want to make sure the real-estate market is good in the town you plan to purchase the house so you will be able to sell it when your child graduates.