By: Stephanie Salmon, CPA

Back to school is a great time to review education funding plans.  A thorough review may yield “teachable moments” to help children learn about budgeting  just how much things cost and, in turn,  help them successfully navigate the world through college and beyond.

A recent TD Ameritrade survey of students ages 13 to 22, found that almost half of them said their biggest concern was paying for college with two-thirds recognizing a college education is essential for success.

Planning for college is always on the minds of parents and even grandparents  alike. Here are some helpful suggestions:

1. Student Loans

The cost of college can weigh down any financial plan. The good news for those paying college costs with loans comes from recent action by Congress. New under graduate loan interest rates have dropped to 3.4%. However, future interest rates are likely to be tied to the market interest rates-- and capped.

If you, your spouse or even your child are looking for employment: suggest a job at a college or university. Most schools cover or deeply discount the tuition costs of an employee or an employee's child, regardless of the position the employee holds.  Also, many schools have reciprocity arrangements with other colleges and universities. However, you will most likely still need to pay for room and board!

2. Watching the Pocketbook

Every year, parents of children from kindergarten through college deal with the back-to-school buying craze.  For the next school year watching and taking advantage of the early advertised sales can lessen the overall craze.  You will save money by shopping early on the “required” back to school supplies and potentially spread the spending over a longer period of time, thus avoiding the panic shopping.

3. Finance 101

Handling money is an important skill, and parents need to start teaching their children the basics of budgeting, saving and spending within reasonable limits. Instilling best practices early just might save a lot of angst later on.

4. Protecting the Most Precious Asset

Identity theft is a concern for adults worried about having their credit cards and bank accounts raided by hackers. But Javelin Strategy and Research notes that even the youngest students can fall prey to the problem, although it usually is undetected until the children are older.

Javelin’s tips for not becoming a victim include: carry Social Security cards and passports only when necessary; if asked for your child’s Social Security number, ask why it’s needed, if there is any other info that can be offered instead and how the data will be secured; ask how schools store and discard sensitive information. Also, teach kids proper password security techniques so it becomes a habit.

5. Gadgets

The start of the school year may mean making sure the student in your life has the latest tablet, laptop and Smartphone, or making sure their gear is up to date.  Many older gadgets have older security as well, and updating the operating systems can solve this issue.

6. Saving for College

Paying for those supplies and gadgets while your kids are working their way from elementary school to high school graduate is one thing, but it’s another to have the cash for college tuition.  Saving and saving early is the key.  Determining the cost of college where your child may attend (including housing, books, and incidentals) can be a challenge; however, there are many online calculators that can help.

Finding a college savings plan should include a 529 plan. These plans have many advantages, including potential income tax savings, estate planning  opportunities, greater control of the assets and flexibility regarding  the investments in the account.  Morningstar notes that in some states money assets in a 529 plan can be withdrawn almost immediately, meaning you can gain tax advantages even if you need the cash for the upcoming semester.

7. College Health Care

Kids going off to college need to be armed with the right information in case they fall ill or are injured. Some insurance plans require preferred clinics and making sure kids know how to find a doctor that will be covered by their parents’ health plan, is important. If a student needs to fund his own health care, most campuses offer clinics, although those costs are rising and some are closing as the requirements of the Affordable Care Act kick in.

8. It’s Never Too Early to Plan

So your child has graduated from college. Some financial obstacles have been handled, however, many graduates carry a heavy debt load, and a recent survey showed that a large percentage of those graduates worry about their ability to repay their debt.

Parents and grandparents can help lighten this burden with solid planning ideas. Even facing these debts, it’s not too early to take advantage of a IRA, Roth IRA or 401(k). Providing advice can be a invaluable gift!