Seven Steps to Help Clients Plan for Their Second Biggest Expense

Posted By on Jul 10, 2013|0 comments


Want to position yourself as a leading fee-only financial advisor? Provide top-notch advice about planning for college education expenses and watch your business grow.

Paying for college can be one of the hardest parts about earning a degree, but it doesn’t have to be. Financing a college education is the second largest expense a family incurs, on the heels of the cost of buying a home. Despite this fact, most fee-only financial advisors do not provide their clients with a sufficient plan for paying for higher education. As a result, clients and their children are financially underprepared for the college experience.

College Money Coach

When David Beck set out to create his financial planning business in 2006, he capitalized on understanding the college funding system. Beck founded this system when his niece asked for his advice about applying for and selecting affordable colleges. While guiding her through the process, David quickly learned the complexities of financing a college education.

He devoted his time to becoming an expert and created College Money Coach and College Money Course. On the sites, he provides special offers like free webinars and immediate resources. Beck also offers various levels of classes so that individuals can better understand the college funding system.

Many people lose out on finanical aid because they are unaware it exists. In his own words, Beck says, “My goal is to make this training available to all families and redress the balance between the consumer and the higher education industry. Families are losing out on aid and access by not knowing how the system works.”

Beck also coaches other advisors to become experts in college funding. His video gives us a glimpse of how easy it can be to provide families with accurate guidance on college funding.

Seven Steps to the College Funding Puzzle

According to Beck, there are seven key steps necessary in determining and planning for college expenses. They are as follows:

  1. Create a Preliminary Plan
  2. Maximize Financial Aid
  3. Select Affordable Colleges
  4. Apply for Aid
  5. Evaluate Offers
  6. Plan Cash Flow
  7. Take Education Loans

While the underlying idea encourages parents to take more initiative in determining the college funding process, Beck lays out each step in pieces that are easy for high school students to digest. He also provides worksheets for his clients to use to get through each step of the process.

Preliminary College Funding Plan

While we can’t dive into all of the specifics of Beck’s plan (watch his video for that), let’s look at the first step: preliminary plan. As outlined by Beck, the preliminary plan formula determines what the family can afford and what schools are in reach. This is something you could easily use to better advise your clients. While there are many details of the plan, here are the basic formulas:

Preliminary plan:

Begin with: Savings
Plus: Portion of parents’ income to apply toward college expenses
Plus: Student’s earnings
Plus: Other family members’ contributions
Plus: Scholarships
Plus: Tax breaks
= What the family can afford

Begin with: Cost of attending
Minus: Need-based aid
Minus: Merit-based aid
Minus: College scholarships
= Net cost of education

College Prep

As the College Money Coach, Beck stands behind a few key points.  He advises families to prepare early and allocate responsibilities. He believes that students can do the heavy lifting, and he argues that if they can get through the process, then they will be better prepared to succeed in college. Beck also emphasizes that financial decisions regarding higher education are family discussions. The value of creating a plan is that it balances the interests of the family as a whole. By creating and implementing a plan, families can reduce the out-of-pocket costs of college.

Comprehensive financial advisors have the chance to be a guiding light in this seemingly overwhelming process. With the right direction, you can help clients cover the second largest expense they face with ease … or at least with a little more understanding.

Next Steps

Watch Beck’s video and think about how you might be able to better advise your clients about financing their children’s education.

photo credit: thisisbossi via photopin cc

photo credit: _Dinkel_ via photopin cc

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