“A goal without a plan is just a wish.”
– Antonie de Saint-Exupery, pioneer aviator
In her book, “How to Graduate Debt-Free,” Kristina Ellis shares a few can’t-miss financial principles. Here are five principles to consider as you start planning financially for college.
Principle #1: Start Early
Procrastination. It’s the quickest way to avoid getting things accomplished. And when you wait, you lose valuable time to consider all your options. So, since you’re interested in attending (and graduating from college), mark that down as your goal.
Too many students wait until their junior year or even senior year (gasp!) to begin planning for college. We recommend that students begin planning for college in the eighth grade. Some financial planners recommend starting in elementary school – especially when it comes to financing higher education.
Why is starting early important?
If you find out as a junior that your favorite college requires three years of the same foreign language, and you’re in French 1, your application would be denied. While most colleges only require two years, a growing number of selective colleges require three.
Since college admission officers are reviewing your 9th – 11th grade GPA, you’d want to make sure you are taking challenging classes and getting high grades as a freshman.
If you’re just getting started as an upperclassman in high school, that’s okay too. While your options may be limited, don’t procrastinate any longer. Work with your school counselor or an educational consultant to develop a strategy and get started.
Principle #2: Make a Plan
The Bible says that "The plans of the diligent lead to profit as surely as haste leads to poverty" (Proverbs 21:5).
Students need to determine what career they want to pursue, what college they want to attend, and how they are going to pay for college. Even if adjustments need to me made, making a plan will alleviate stress and uncertainty.
If you are still reading this article, then you are interested in creating a successful college plan. You need to find a trusted professional or independent educational consultant that will help you create a personalized plan to help you discover the right career and college for you.
Be diligent. Make a plan.
Principle #3: Create and Maintain a Budget
When you start mowing lawns, babysitting, or serving customers, you also need to create and maintain a budget. There are many budgeting tools available online through your bank or other financial resource. Find one and get started!
The spending and saving principles you learn with a budget of $1,000 can also be applied when you have to manage $50,000 per year. When you attend college, they expect to be paid (for the classes, housing, food, fees…) at the beginning of each semester.
Ellis shares that “not monitoring your spending habits can cause you to pay out significantly more than you anticipated, further distracting you from your goals. Especially since college turns out to be far more costly that families expect” (p11).
This is one reason you want to work closely with your school counselor or an educational consultant.
Principle #4: Avoid Debt
There are many ways to avoid owing debt for your college education.
Earning high grades and getting high standardized test scores is the best way to avoid debt. Why? Because those two factors are used to determine how much merit aid a college will award a student. And since it’s renewable, you have a chance to reduce your out-of-pocket costs significantly.
Students are starting at community college to save money – and some two-year schools are offering free tuition to local students. One valedictorian started his college journey at a community college. They waived his tuition because they were so excited to have him as a student. He eventually graduated from Texas Tech and works as a pharmacist.
For those who don't want to start and transfer from a two-year college, should consider attending a public university (and commuting) to save additional money. To begin with, public schools are cheaper than private ones. Commuting means you're living at home and driving to school. It's a different experience - but you are avoiding lots of debt.
While some private universities have a sticker price of $70,000 per year, they offer the best merit aid. They have tuition discounts of almost 48 percent!
Apply for private scholarships. Lots and lots of scholarships. Earning lots of $100 and $250 scholarships will add up in the end. And that will keep you out of debt.
Just remember that loans are used to fill in the gaps and should not be considered until all other resources are exhausted. If you do get a loan, use your budgeting tools to devise a way to pay this off as soon as possible.
Principle #5: Use the Power of Compound Interest
In 1 Corinthians 16:2, Paul instructed each follower of Christ to "set aside a sum of money in keeping with your income, saving it up."
If you want your money to work for you, instead of you working for money, start saving early. As mentioned above, when you bring home your paycheck, you should start saving at least 10 percent of your income. Use the 10-10-80 Principle: if you tithe 10 percent and save 10 percent, you can live and enjoy the remaining 80 percent.
Then, when you invest that money in an account that is earning interest, you’ll see what compound interest does for you.
As you can tell from this article, it is important to start early when saving money and planning financially for college. Take the time to connect with an expert so you can make wise decisions.
Through student ministry and educational consulting (career and college planning), I have enjoyed guiding teenagers to discover their higher calling.