For many, going back to school is the key to achieving a dream. It might allow you to pursue a new career. It could also be what you need to advance in your current line of work. But figuring out if your spouse can afford to go to college can be challenging. This is especially true if you are raising a family together.
Going Back to School and Supporting a Family
If your spouse wants to go back to school, you need to sit down together and come up with a plan. There are a lot of points to consider. Things like the management of household expenses and the cost of college are major considerations.
However, by examining each area carefully, you can come up with a viable approach.
Figure Out Your Household Income Requirements
Before your spouse heads back to school, it’s critical to examine your household income requirements first. Does your spouse need to keep working full-time (if they are currently employed)? Can they take time away from the workforce or something in between?
Start looking at your household expenses. Include everything that would be listed in a formal budget, such as housing, utilities, insurance, car payments, groceries, and any other cost you incur regularly. List the monthly payment or budgeted amount for each category and get a total.
Making Room in the Budget
As you review your expenses, you can identify any areas where you could make cuts. For example, if you are willing to downgrade or eliminate cable to make going back to school easier to afford, discuss that with your spouse now. Then, see how much you would save and create a second budget and total based on these cuts.
You may also need to add new expenses for when your spouse goes back to college. For instance, if you will need to add daycare for your children, that is a new cost you’ll need to manage. Commuting expenses could also go up, or there could be a change in your health care premiums if your spouse needs to quit their job to go to school.
In the end, you should have two different totals. One represents your income requirements to maintain your current lifestyle. The second is a reduced amount based on making cuts.
Examine Your Savings and Investments
Next, you need to explore how much you can afford to invest in your spouse’s education from your own savings and investments. For example, if you have a 529 savings plan that your spouse could use, that will help reduce your out-of-pocket expenses.
Similarly, if you have non-retirement investment accounts, those are worth exploring as possible sources of educational funding. Regular savings could also help, but make sure that you plan to maintain a solid emergency fund even while they are in school.
Should I Use My Retirement for School?
You also have the option to withdraw funds from traditional or Roth IRAs without paying the 10 percent early withdraw penalty (suggesting you are under the age 59 ½) if the money is going to qualifying educational expenses. However, if you make a withdrawal, you could owe income taxes on that amount. Additionally, the money could qualify as income on your spouse’s financial aid paperwork, and that could harm their chances of getting need-based assistance.
Ultimately, it isn’t always wise to sacrifice your retirement savings, even for your spouse’s education, though it is technically an option on the table.
Explore Schools and Financial Aid Options
After the examination of your savings and investments, begin exploring the different school and financial aid options. Have your spouse find cost information for each school they may want to attend. This information is readily available on the school’s website, usually in a section dedicated to prospective students.
Once you have cost information, it’s time to get an initial idea about financial aid. Even if your spouse hasn’t applied to a college or completed their FAFSA, you can still craft financial aid estimates using information from most school websites, as well as the FAFSA site.
Consider Grants and Loans for College
If you are a low-income household, your spouse may qualify for grants or need-based aid. These reduce your out-of-pocket expenses, making college more affordable. He or she may also get access to federal student loans to help cover the difference, meaning you don’t necessarily need to pay in cash.
However, relying on student loans shouldn’t be taken lightly. While the interest rates aren’t terrible, these are typically large debts. Student loan payments can get quite high very quickly, and they could harm your financial future. While they may be an option that is available, it’s wise to exercise caution before considering them a reasonable solution.
Look for Scholarships
Your spouse can also explore scholarship opportunities to help pay for school. Unlike student loans, these funds don’t have to be paid back. Plus, your spouse may win multiple scholarship awards, potentially covering all of their school costs.
There are tons of scholarships out there, all with different qualifications. With a quick online search, your spouse can likely find a slew of options that may help them pay for school.
Coming Up with a Final Decision
After you have all of this information, you should be able to determine if your spouse can afford to go back to school. Additionally, you should know whether they need to keep working, can shift to part-time, or can leave the workforce temporarily to focus on their studies.
If he or she needs to stay employed while going back to school, don’t forget to examine education and financial aid options for part-time students. Though this may mean it takes longer for your spouse to finish their degree, it can make the cost more manageable and ensure they aren’t overwhelmed by their school schedule.
Plan for the Future
In cases where it turns out going back to school isn’t affordable right now, you still have valuable information that can help you both plan for the future. You can set up savings goals, learn more about maximizing financial aid, or begin hunting down scholarship options that could handle their college expenses. Then, in a year or two, reexamine the situation to see if now is the time.
Ultimately, getting an education can be great for landing on a lucrative career path, but you shouldn’t sacrifice your financial well-being just to try and make it happen right away. If it is a viable option, then great. If now is not the time, then craft a plan to make it work in the near future.
Do you have tips on going back to school and supporting a family? Share them in the comments below.
Read More:
- Who Should Sell the House When You Get Married?
- Top 5 Questions for Couples About Money
- Should I Buy a Home with Student Loan Debt?
