4 ways to get your kids involved with saving for college

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Should parents foot the bill for college? Some moms and dads say no. In fact, a study from Discover Student Loans revealed that only 77 percent of parents plan to help pay for their child’s college, down from 81 percent in the previous year. For some, it’s because they simply can’t afford to, but others believe that college is a privilege that their children should earn by working for it. These parents feel that it’s never too early to teach kids the value of hard work. And you know what? It does pay off!

A 2013 paper by a sociology professor at the University of California Merced shows that tuition help from parents can actually lead to lower grades. And while college students who have part-time jobs may have less time to devote to studying, students with too much free time sometimes focus too much on having fun. This can be especially detrimental to students from low-income or middle class students who won’t have family connections to rely on when it comes to finding a job after graduation.

Yet with college costs continuing to rise faster than inflation, it’s going to cost over $200,000 to send a child to an in-state four-year public school in 18 years. So it’s no wonder that mom and dad usually do end up stepping in to help. But instead of just writing a check on the way to their new dorm room, how about getting your kids involved while they’re young? Here are some creative ways that have worked for other families:

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1. Make them work for it.

Kids need to understand that although college is expensive, the potential return on investment can be very high.

When it comes to money, Deborah Sweeney, CEO of MyCorporation, and her husband work on finding opportunities for their two sons to earn more, spend less, and think creatively. Graduates of business school and law school, the Sweeneys highly value their education and want to ensure that their children aren’t discouraged by tuition costs.

“As soon as they are old enough, they will certainly have part time jobs. In the meantime, they earn money through chores”, says Sweeney.

2. Create a system for saving.

Kids tend to respond much better when they know what’s expected. That’s why Monique Price of New Hampshire set up a saving system when her children were young and diligently stuck to it. Here’s how it works:

Any money that the kids receive has to be divided as follows-

• 10% tithing
• 10% retirement
• 10% for car-college-house (in that order)
• 70% for “anything they want”

Price and her husband have also set up a 529 fund, which the kids will be expected to contribute to once they have regular income from a part-time job. Their system is already working to teach the kids financial responsibility. In fact, they often take some of the “anything” portion and deposit it into the car fund.

RELATED: Why you should teach your kids about money

3. Match their contributions.

Saving enough for college is tough, especially when your only income consists of proceeds from a lemonade stand. Matching your child’s contributions is a great way to give them a boost while instilling the value of money.

Nationally recognized financial expert Mark Kantrowitz suggests matching your child’s savings dollar for dollar.

“Not only does this provide an incentive for college savings, but it teaches the children good money management skills,” says Kantrowitz.

If you deposit the money into a 529 plan, be sure to review the quarterly statements with your child. Seeing the effects of compound interest and tax-free growth should encourage them to save even more.

4. Enlist help from Grandma and Grandpa.

According to a survey from Fidelity, 72 percent of grandparents feel that it’s important to help pay for their grandchildren’s college education. So why not earmark that annual birthday or holiday check from Grandpa for college savings?

Bill Fish, founder and president of ReputationManagement.com, swears by this method for his two young sons. Every year on their birthday, Grandpa Rudy sends a check for $100 plus their age. His sons understand that these checks are not for spending, but they go right in the bank for college.

The boys not only have a head start on their college fund, but Fish says the tradition has also “been able to foster good conversations even at a young age as to how important and expensive a college education is.

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