Nearly one-third of all households in New Jersey are headed by a single parent. Some receive support from their former partner, but a substantial number of single parents live on their own income. Frequently, a non-custodial parent is unable to contribute alimony or child support for a number of reasons.
This puts a lot of pressure on the custodial single-parent to provide for their children financially and give the children what they need. Money for college is no exception.
Currently, university tuition rates are skyrocketing. This has made saving money for their children’s college fund a daunting task for many single parents. Then again, there are several ways that you can start and grow a college fund for your children that you can afford. You can make small contributions to your child’s trust fund over a long period of time that can allow your child to pursue higher education.
Set Your Differences Aside with Your Ex
If a conflict exists, try to put differences aside in an effort to work together even if he or she is contributing nothing to your child’s future education. The goal is to make him or her aware that:
- There is a college fund for the children you share and any help is appreciated.
- 100% of contributions will be deposited and a receipt will be provided.
- Your ex’s help will be acknowledged to the kids.
The idea is to always leave the option open to give without guilt when your ex is able to help out. Empathy can be an effective tool you can use to help you collect a substantial amount of money for your child’s college education.
Take Advantage of Tax Credits
There are plenty of deductions and tax credits that you should use while you are paying for your children’s college fund. The IRS specifically provides the following tax credits:
- The American Opportunity Credit offers up to $2,500 in tax credits (up $1,000 of which is refundable) per student for a maximum of 4 years.
- The Lifetime Learning Credit offers up to $2,000 in tax credits per tax return for an unlimited number of years.
- The Tuition and Fees Deduction offers up to $4,000 in deductions per tax return.
You should plan for the financial burden that tuition puts on your finances in advance and take these tax benefits into consideration. This will allow you to have more cash flow down the road. Plus, if you have more than one child, you can strategically use the benefits to help pay for college for your other children.
Encourage Academic Excellence
It’s much easier to pay for college when scholarship money is on the table. Whether it be through sports, academics, or both, intellectually engaged children are top contenders for the best scholarships the higher education system has to offer.
Seventy percent of all scholarships awarded pay full-tuition benefits. Of course, not all children thrive in the rigors of academics. If there is an area in which your child thrives, you should encourage your child to apply for a scholarship that highlights your child’s area of expertise. For example, there are also scholarships for excellence in a particular field, such as music or writing.
Discuss Potential Modifications to the Agreement
Sometimes, an ex will ignore his or her obligations towards paying for your child’s college. Your ex may believe that paying child support or alimony is enough, but your ex should be willing to pay for your child’s college education if you are.
By working with experienced divorce lawyers in New Jersey, you can have your post-divorce agreement amended to include college tuition savings. Lawyers also possess a keen eye for family and financial planning. It’s worth making the call.