Even if you get financial aid, you may have to use some of your own money to pay for college expenses. This is why financial planning is an important part of preparing for the cost of college.

1. First, define your goal in numbers. It does not have to be exact, but it’s a place to start. Begin with your ideal goal – you can always adjust it later.
2. Understand the basics. The better you understand the different ways you can prepare for the cost of college, the better your the decisions will be.
3. Make a plan. Keep in mind that:
   • The cost of college is not the only thing you will need money for. Remember to plan for all of your family’s future needs.
   • You may need to use multiple financial strategies to meet your goal.
   • You may need to adjust your goal.
4. Act now. The earlier you start setting aside money, the more time it has to grow. See how these two families will save for college:
   • The Smith family starts saving $100 per month for their 12-year-old son in a low-interest savings account. By the time he is 18, they will have put in $7,200 and earned $1,873 in interest. The total amount in their account at that time will be $9,073.
   • The Jones family started saving for their 12-year-old daughter when she was born. They put $100 per month in a low-interest savings account (like the Smiths) until their daughter was 6. They put in a total of $7,200 like the Smiths, but when their daughter is 18, they will have earned $4,307 in interest. They will have a total of $11,507 in savings.