Saving for Your Child's Semester Abroad
A semester abroad can be life-changing for your child. The opportunity to experience life overseas can help to broaden their horizons and even open doors to career opportunities.
But sending your child abroad doesn't have to be costly. With some financial planning and time on your side, you can help your child have a great college experience overseas.
Take Advantage of Your 529 Plan Account
If you haven't opened one, it might be a good idea to do so. This tax advantaged account helps parents save for their child's education tax-free. In some states, they'll even offer incentives by matching part of your contribution each year. Instead of gifts during the holidays, your child can ask family and friends to contribute to a 529.
And yes, schools abroad can qualify for 529 distributions. As long as it's an institution that's eligible to be part of the student aid program through the U.S. Department of Education, you should be all set. Just make sure you do your due diligence and confirm. To do so, you can use the Department of Education's federal school code search functionality and select "foreign country" to search international schools. You can even call the Federal Student Aid Information Center to double check.
Research Cost of Living
While tuition abroad may not be that much more compared to ones within the U.S., it's the cost of living that can get expensive. Exchange rates can add up, as well as living in high-cost cities like Paris, London, or Hong Kong.
Take some time to research more affordable locations that offer similar academic programs, such as Southeast Asia or South America. See how much it costs for living expenses including groceries, rent, and transportation to get a better sense of what your child will be spending.
Take those estimates and start putting some money aside in a high-interest savings account so that you can take advantage of earning extra money on top of what you save. If you start early, even as little as putting aside $5 a day, it can really add up.
Find Work or Internship Opportunities
Part of the college experience letting your child learn to live on their own. If your child wants to earn extra money for traveling that you just don't have, see if they'd consider looking for work while on their semester abroad. Many colleges have work-study programs or part-time jobs on campus and your child can use the funds for travel or even living expenses. The bonus is that he or she can learn to budget with their income, helping them become responsible adults.
While studying abroad can be intimidating for parents and students alike, it can be well worth the experience. As long as discussions about finances, academics, and safety are done well before overseas, they should be prepared.