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High school students are likely aware of the academic steps they need to take to get into college and what they can do to help pay for it. But what about younger kids? How much do they know about the financial path to higher education?
As you plan and set aside money for your child's future education, here are some ways to introduce those concepts early on.
The answers will vary from year to year—veterinarian, artist, boat captain, fairy princess, teacher, paleontologist—but this question can spark a conversation about what the child needs to do to make that dream happen.
You can use these ideas as an introduction to specialized schools for different jobs (although we're not sure which colleges offer fairy princess degrees). And as your child gets older, expand the discussion to include career options, college planning and college savings.
The majority of teens say their knowledge of money management basics came from their parents.* That knowledge needs time to grow, just like their savings accounts, so get them started with age-appropriate money lessons.
Whether it's saving up for candy in the checkout line, the latest video game, or college 12 years into the future, your child can practice delaying instant gratification in favor of future rewards. Setting short-term savings goals—and achieving them—can give kids the confidence and assurance that long-term goals are possible.
Additionally, engage your children in the savings process. Together, your family can watch a college account grow over time, and your child will see how regular investments and additional contributions can give college dreams a boost.
If your child receives an allowance or has a part-time job, a portion of those earnings could be added to the college savings account. You can also request that friends or relatives contribute to the account as part of their birthday or holiday gifts.
Remember, college is a shared dream, so keep your child involved along the way. Find out if you're saving enough, and learn more about available investment options, such as 529 college savings plans. Or call us at 1-800-345-2021 for help.
Find out if you're saving enough and learn more about available investment options. Call us at 1-800-345-2021 for help.
* 2015 Junior Achievement Teens and Personal Finance Survey
The opinions expressed are those of American Century Investments (or the portfolio manager) and are no guarantee of the future performance of any American Century Investments' portfolio. This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.