Editor’s Note: Joe works with families to navigate education funding decisions, student loan considerations, and strategies for incorporating education planning into their broader financial picture. He holds the Certified Student Loan Professional (CSLP®) designation, which reflects specialized training in student loan and education funding strategies.
The cost of higher education continues to rise, and many families are wondering how they will balance future education expenses with their other financial goals. While every family’s situation is unique, there are several proactive steps parents can take today to help prepare for tomorrow.
There is no one-size-fits-all approach to education planning. A thoughtful strategy can help families evaluate available options and make informed financial decisions.
1. Start Saving Early
Time can be one of the most valuable tools when planning for education expenses.
For many families, a 529 education savings plan may offer a flexible way to save for future educational costs while providing certain tax benefits. While originally designed for college expenses, under current tax rules, 529 plan funds may be used to pay certain qualified education expenses at eligible institutions — which can include some trade schools, vocational programs, and professional certification programs — subject to IRS rules and plan restrictions. Check your plan documents or consult a tax advisor to confirm whether a specific program or expense qualifies (see IRS Publication 970 for details). Under current law (see SECURE 2.0 Act of 2022 and IRS guidance), eligible unused 529 assets may be rolled into a Roth IRA for the beneficiary, subject to statutory limits and plan rules (for example, account‑age requirements, applicable annual Roth contribution limits, and any lifetime caps). Consult your tax advisor to determine applicability to your situation.
The key is to start where you can. Even modest, consistent contributions made over many years may help build savings toward future educational expenses. Additionally, many 529 plans allow family members and friends to contribute directly, making birthdays, holidays, and special occasions opportunities to support a child’s future educational goals.
2. Talk About the Financial Side of Education
Education is one of the largest investments many families will make, yet discussions often focus solely on academics rather than financial implications.
As children get older, involving them in conversations about the cost of education and potential career outcomes can help them make more informed decisions. Questions worth exploring together include:
- What are typical earnings in the field being considered?
- What level of education is required to pursue that career?
- What costs may be associated with obtaining the degree, and how might those costs be funded?
- Will a higher-cost school meaningfully impact future opportunities?
- Are there alternative pathways, certifications, apprenticeships, or trade programs that may achieve similar career goals?
Understanding both the costs and potential benefits of an educational path can help families make decisions that align with their long-term financial objectives.
3. Create a Funding Strategy
Saving for education is important, but so is having a plan for how those savings may be used.
Many families find it beneficial to coordinate education savings, available financial aid opportunities, scholarships, grants, and student loan programs as part of a broader funding strategy. In some situations, it may also make sense to preserve a portion of savings for future educational expenses, such as graduate or professional degree programs.
Because financial aid rules, loan programs, and tax laws can change over time, reviewing your education funding strategy periodically may help ensure it remains aligned with your family’s goals and circumstances.
Final Thoughts
Preparing for future education expenses is often most effective when approached as part of a broader financial plan. Thoughtful planning may help families evaluate available options, balance competing financial priorities, and make informed decisions over time.
Whether your child is years away from college or beginning to explore post-secondary opportunities, taking proactive steps today may help create greater flexibility in the future.
If you’d like to discuss how education planning fits into your broader financial plan, the team at Measured Wealth is available to help you explore your options.
Disclaimer:
Information presented in this article is believed to be factual and up-to-date, but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. The information in this article does not involve the rendering of personalized investment advice but is limited to the dissemination of general information.
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