Common Educational Planning Mistakes to Avoid

Common Educational Planning Mistakes to Avoid

Education planning mistakes can quickly snowball into expensive headaches. Learn how to anticipate and avoid them with help from Avior.

According to the Education Data Initiative, tuition rates for public, four-year universities increased by nearly 40% between 2011 and 2023, with a 2.64% average annual tuition inflation rate.

Needless to say, education planning matters today more than ever.

While education planning stretches beyond college to vocational instruction, certifications, personal development, and other forms of learning, mistakes that are left unchecked all result in the same ramifications: financial instability and a scramble to get yourself back on track.

The right foundation is important, and maybe you’ve already got one. But staying alert to common education planning mistakes is just as important as starting off on the right foot.

Learn what these mistakes typically look like and how to avoid them.

Mistake #1: Procrastination

Ah, yes. Procrastination. Something that affects just about every facet of our daily lives.

Many of us handle procrastination in one way or another. Unfortunately, delaying educational planning leads to more than just stress, missed opportunities, and financial strain. 

For instance, you may miss a college scholarship deadline without proper planning, or maybe you’ve severely underestimated the cost of private K through 12 schooling in your area because of misinformation you were previously relying on.

Regardless of whichever stage of education you’re saving for, starting early and beating the temptation to procrastinate gives you ample time to explore your options and make informed decisions without feeling rushed.

Mistake #2: Taking a One-Size-Fits-All Approach

Educational needs vary greatly from family to family. Not all children will eventually pursue a traditional four-year college degree, and even if that’s something they’ve voiced interest in, who’s to say they won’t change their minds?

The hard truth is that you can’t possibly plan for everything, but you can at least prepare for anything. With education planning, that requires truly understanding the individual interests of your children and how those might translate to future education options.

Perhaps you’re planning to send your child to a traditional university, but what plan do you have in place should they decide to pivot to, say, a trade school or online program?

Gone are the days when it was college or bust. Pathways to higher education are more diverse now than they’ve ever been, so it’s not an unrealistic strategy to consider how the modern landscape may affect your child’s interests as they mature.

Combine that with the fact that academic advising is a historically underresourced profession, and you have a strong case for thorough and accurate education planning.

Mistake #3: Half-Baked Education Plans

Education planning often falls into that “I’ll handle it later” bucket, and even if it doesn’t, it’s easy to forget that education planning is so much more than just tuition expenses.

If your child elects to attend a traditional university, you have to look beyond the costs of classes and into the costs of living. 

What’s your plan B if funding falls through and they can’t dorm on campus (which now costs an estimated $53,000 for all four years)? How will you approach finding off-campus housing? Do you have an emergency fund in place for that? Will you or your children be responsible for paying rent? What about food and other miscellaneous expenses?

These questions and more must be answered as far in advance as possible to create an accurate and thorough education plan.

Mistake #4: Failing to Research and Explore Funding Options

Another easy trap to fall into is the “That’s what everyone else does” mentality. In education planning, it’s all too easy to say, “My child can just borrow money if they need to because that’s what everyone else does.”

The unfortunate reality is that many families overlook the steps they can take in advance to stay out of that flawed mindset, some of which involve researching and exploring funding options that don’t involve borrowing copious amounts of money at high interest rates.

After all, our student loan crisis exists for a reason.

A good place to start is by researching the specific institutions, programs, career paths, and financial aid opportunities that may be the most relevant to your child based on their interests so far. 

From there, you can create contingency plans that account for changes in their career trajectory without having to fall back on loan debt.

Mistake #5: Neglecting Efficient Savings Vehicles

Finally, it’s not just about how much you save but how you save that money in the first place. 

The common education planning mistakes in this list are all interconnected: procrastinating leads to a rushed one-size-fits-all approach, which leads to half-baked education plans, which leads to failing to explore all available funding options, which leads to neglecting efficient savings vehicles.

Common savings vehicles for education planning include:

• 529 college savings plan: With these plans, withdrawals are tax-free as long as they’re used for qualified educational costs. They have high contribution limits, growth is tax-deferred, and contributions are tax-deductible in many states.
• Roth IRAs: These IRAs can be beneficial for education costs as well as retirement. You can withdraw funds without penalty if you use them for education.
• Coverdell education savings account: This type of trust is specifically used for covering education costs. You set it up for a designated beneficiary, and it can be used for college, elementary, or secondary education costs if they qualify.

These accounts can help you maximize your educational savings while taking advantage of tax benefits.

Plan for the Possibilities With Guidance From Avior

It’s tempting to feel like you have to do all of this on your own. You may believe that, as long as you’re putting something away into a savings account, you’re fine. 

But the truth is that you don’t know what you don’t know, and much of the time, a qualified financial advisor is the only one who can enlighten you to the specifics of your situation.

When you work with the team at Avior, we take the time to get to know your personal situation and long-term goals. Our approach to education planning isn’t just about getting your money right but ensuring your beneficiaries get the lifestyle you want for them.

Take action now to build a better future.

Contact Avior today to set up a one-on-one consultation with an experienced financial advisor.

Disclaimer: Nothing contained herein should be construed as legal or tax advice. Avior and our Advisors will work with your attorney and/or tax professional to assist with your legal and tax strategies. Please consult your attorney or tax professional with specific legal and/or tax questions. Investment Management and Financial Planner are offered through Avior Wealth Management, LLC, an SEC-registered investment advisor. Past performance is not a guarantee of future results.  Investments are subject to loss, including the loss of principal.