Wednesday, May 29 is National College Savings Day. It’s never too early to start thinking about funding your child’s education. With college tuition costs upwards of $20,000 a year and student loan debt topping an estimated $1.1 trillion, higher education has become increasingly unaffordable for most families.
Wednesday's designated day highlights the importance of saving for college through tax-advantaged 529 plans, which ease a family’s financial burden by allowing for tax-free growth and withdrawals of earnings for college-related expenses.
Setting up an automatic monthly deposit in a 529 plan is an excellent option for many families. Some states even offer tax deductions or credits for plan contributions. Check out the special incentives, contests, and promotions your state may be offering to boost participation in their 529 savings program—and see if it’s a fit for you.
Unfortunately, most families could never afford to put multiple children through school at a private university, regardless of how aggressively they save.
My parents were in that position. My mom ran a beauty salon in our home, and dad worked in a factory.
Even if they stretched their budget to stash away $50 per month for college, they could never have footed the bill for the $50,000-per-year education my brother and I were eventually able to attain through scholarships.
While I highly encourage a habit of saving toward a college education, there is a priceless investment parents can make that can yield enormous returns: investing directly in the lives of your children and encouraging your future scholars to invest in themselves.
The payoff could mean hundreds of thousands of dollars in scholarship money for your son or daughter’s college education.
In Malcolm Gladwell’s book "Outliers," he analyzes research based on a sample of child geniuses.
The study follows these high-IQ children into adulthood, noting that some of them became extremely successful while others fell far below their potential.
Only one factor determined the difference: “a community around them that prepared them properly for the world.”
You can make a huge difference in growing your student into a success and helping him or her stand out to scholarship committees. And that investment can open the door to the billions of dollars given away in scholarships every year.
I feel very fortunate that I was taught certain core values that ultimately laid the foundation for me to win $500,000 in free money for college. These “scholar qualities” (as I refer to them in my book "Confessions of a Scholarship Winner" are investments any parent can make in his or her child. When properly directed, these qualities can turn even an average student like I was into a scholar—and a scholarship winner.
- Work Ethic. Help your student understand and apply the principle of “Plan the work and work the plan” in his or her life. As my mother demonstrated to my brother and me at a very young age, even a lemonade stand can teach the impact of hard work. After two long, hot days of sitting in the sun our first weekend in business, we earned over $200, enabling us to buy the trampoline that we wanted so badly. Learning that hard work can result in favorable outcomes encourages students to go the extra mile, working hard to build a college résumé that stands out.
- Involvement. Guide your student into activities he or she can become passionate about. Scholarship committees love to see students who are committed and involved in their schools and communities. My mom made a deal with me in middle school: if I would join clubs and participate in sports—even if I wasn’t good at them—she’d give me an allowance. Her continual encouragement to get involved enabled me to eventually find activities I loved and excelled in. Find ways to encourage your student to “get busy” and make activities a normal part of his or her everyday life.
- Volunteerism. Teach your students to give back and understand the benefit of supporting causes beyond themselves. Not only will your son or daughter grow as a person, but those efforts can make a big impression on scholarship committees. During my freshman year of high school, I went on a mission trip to Haiti. Although it was a financial stretch for my family, the investment paid off: I acquired a passion for helping others that led me to log over 1,000 hours of community service throughout high school. These service opportunities became a primary topic in my winning scholarship essays. Instilling a heart for volunteerism in your student will not only enhance his or her application but will also help positively impact the world.
- Leadership. Seek out opportunities to develop self-confidence and teamwork in your children. These traits will produce leaders that scholarship committees love. One scholar’s parents encouraged each child to organize and “own” an entire family outing. Such intentional efforts allowed the children in that family to capitalize on their natural abilities and gain additional leadership skills. With just a little forethought, parents can establish leadership qualities within their children.
- Perseverance. Positively impact your child by demonstrating perseverance. My mother’s example after my father passed away laid the foundation for me to overcome my own obstacles. She opened a hair salon in our home so that she could be there for my brother and me. She included me in her business development process and tried to help me understand everything she did. Despite encountering numerous difficulties, her persistence taught me to keep my head up and keep strategizing. The obstacles you face are great opportunities to instill the perseverance that will carry your student on to success in scholarships and in life.
Investing is all about multiplying our resources. Use today to think about your strategic plan for ensuring your student’s access to the higher education of his or her dreams. For parents, making frequent "deposits" into your child’s life—and not just a savings plan—can be your greatest investment toward your student’s success!