Friday focus: Personal finance

It feels like someone kicked you in the stomach. Your pulse is racing. You’re not sleeping well. Many parents preparing to send children off to college in the next year or two are feeling like that.

Punished by staggering declines in the stock market, many families have lost big chunks of money that was stockpiled from years of scrimping and saving to pay for college. There are numerous cost-effective strategies parents can try to stretch their education dollars. Among the suggestions:

•Keep the end game in mind. Help your high school senior see past the glossy college marketing brochures and put her disappointment about changed plans into perspective.

“While you may have set your heart on school X, school Y can probably give you just as good an education,” said Mark Kantrowitz, who runs Finaid.org, a financial aid Web site.

•Two to make four. Community colleges are a strong, reasonably priced option for students, especially those unsure about a major or not really emotionally ready for dorm life and large classes. Average annual tuition and fees at public community colleges runs about $2,361 versus $6,185 at four-year public colleges.

•Test out. If your high school senior (or junior) is taking advanced placement courses but is on the fence about taking the final exams this spring, keep in mind that high test scores equal college credits. And college credits earned in high school should reduce the amount of your total college costs.

•Ignore the conventional wisdom. “As far as students who want to go to private school, I tell them, don’t worry,” said Stephen Heiner, founder of Get Smart Prep, a Kansas City-area test preparation company. “There has always been more money available at private schools, and again, because the prevailing wisdom is often wrong, there are legions of people who now aren’t going to apply because they don’t think they can afford it.”

•Tough financial love. Finally, try this hedge against dwindling college funds – require your children to help pay the tab, said Susan Beacham, who runs Money Savvy Generation, a Chicago-area developer of children’s financial education products.

“Get them used to the idea that they need to contribute, that Mom and Dad will not be delivering a four-year private education on a silver platter,” said Beacham.

The Kansas City Star