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Supporting Success: Navigating Your Child’s Education
Click below to listen to Episode 233 – Supporting Success: Navigating Your Child’s Education
Supporting Success: Navigating Your Child’s Education
Discover six biblical principles to help you steward your child’s education wisely—without breaking the bank or missing God’s unique calling for their life.
More episodes >>
How can Christian parents wisely navigate the rising costs of education while honoring their child’s unique, God-given design? In this episode of Christian Financial Perspectives, Shawn and Matthew share six Biblical principles for stewarding your children’s education—from discovering their strengths to choosing the right savings strategies.
You’ll learn about state-funded programs, alternatives to traditional college paths, and smart financial tools like 529 plans. Whether you’re just starting to plan or already feeling the pressure, this episode offers practical guidance and encouragement to steward both your finances and your children’s futures with faith and wisdom.
HOSTED BY: Shawn Peters
CO-HOST: Matthew Barrovecchio
Mentioned In This Episode
Christian Financial Advisors
Website
Matthew Barrovecchio
Shawn Peters
Bible Verses In This Episode
PROVERBS 22:6
Train up a child in the way he should go, and when he is old he will not depart from it.
Want to ask a question about your specific situation? Schedule a complimentary 15 minute phone call.
SCHEDULE AN APPOINTMENTDid you enjoy this episode? Sign up for email updates and never miss an episode.
EPISODE TRANSCRIPT
Shawn (00:00):
Are you overwhelmed by the rising cost of education and wondering how to best prepare your children for their future without breaking the bank? Well, today we’ll explore six biblical principles for stewarding your children’s education from discovering their God-given talents to smart saving strategies that could save you tens of thousands of dollars. So let’s get some perspective. Welcome to Christian Financial Perspectives. I’m Shawn Peters, and today I’m joined by Matthew Barrovecchio. Matthew, we are tackling a topic that keeps many parents up at night how to wisely steward our children’s education.
Matthew (00:44):
Yeah, that’s right, Shawn. As Christian parents, we are in a position where we want to provide the best opportunities for our children while also being the best stewards of the resources that God has entrusted us with. And a key to approaching this educational process and decisions is not just with earthly wisdom, but also biblical principles.
Shawn (01:05):
And the great news is that there are more options and opportunities available today than ever before. Matthew, let’s start with what scripture tells us about training up our children.
Matthew (01:15):
Yeah, absolutely. So the foundation today is going to come from Proverbs 22:5, which says, “Train up a child in the way he should go, and when he’s old, he will not depart from it.”
Shawn (01:27):
I love that verse because it emphasizes training them in their way, not necessarily our way or society’s expectations.
Matthew (01:37):
Yeah, exactly. The verse is often misunderstood. It’s not saying train up child in the way that you want them to go, but train them according to their God-given design, their natural bent, and their unique calling. And when we do that, we’re going to continue to walk in the path throughout their life and help them along the way to fulfill what God has designed them to fulfill and be.
Shawn (01:59):
Yeah, that’s such an important distinction and it really sets the stage for our discussion today. We’re not just talking about funding education, we’re talking about partnering with God to discover and develop each gifts he’s placed in each of our children.
Matthew (02:15):
Yeah, absolutely. And so we’re going to do so through a few different principles. There’s six of them that we’re going to dive into. The first one here I have labeled as program awareness. So many parents don’t realize at the high school level and below there are significant education benefits that the states offer today. It’s not just about public school funding anymore.
Shawn (02:38):
Okay. So what kind of programs are we talking about?
Matthew (02:42):
Yeah, so many states now offer assistance for homeschooling, for co-ops, private schools, et cetera. For example, there are states that have tax credits and deductions or for education, some of them, Illinois, Indiana, Louisiana, Iowa, Oklahoma, Arizona offers scholarships up to I think $7,000 per student. And the great state of Florida has programs that redirect education funds from the state, and currently it’s about $8,000 per student per year.
Shawn (03:17):
Wow. That’s substantial. So parents really need to research what’s available in their specific state?
Matthew (03:24):
Yeah, absolutely. The programs differ from state to state, but they can significantly reduce the burden of providing quality education for your children, especially if you’re doing a homeschooling route or something that’s maybe not the norm via public school and not doing it. It’s like you’re leaving money on the table if you don’t investigate what your state does offer and try to take advantage of it.
Shawn (03:46):
And that leads us perfectly to your second principle, child awareness. Talk about what that means.
Matthew (03:54):
Yeah. Child awareness is about investing the time and attention to truly understand and know what your child’s strengths and God-given passions are. It’s not just about academic subjects, but understanding how God has designed them and wired them. Do they tend to be more hands-on learners? Do they excel in the more creative aspects of life? Are they natural problem solvers and all things to observe and consider?
Shawn (04:22):
And this requires intentional observation over time, doesn’t it?
Matthew (04:27):
Yeah, precisely. Yeah. We need to watch them play. We need to know what energizes them. We need to notice what makes them excited and what comes naturally to them versus things that they struggle with. Some of them naturally are entrepreneurs. The child that wants to do the lemonade stand several times in the summer, others are caregivers, others are builders, so on and so forth. Part of our job is to really discover these and nurture them, these God-given inclinations that they have.
Shawn (04:57):
Which brings us to point number three, and this might be challenging for some parents. Forget your expectations.
Matthew (05:04):
Yeah, exactly. So it’s probably one of the hardest ones for parents to adopt, especially in American culture and especially from an earthly perspective. But we need to have a plan that is according to the type of the career that the child wants and that the child’s passions aligned with and not pressure them down a path that we as parents want for them. So maybe someone’s a doctor and has always envisioned their child following in their footsteps, taking over the family business and sharing that passion with them. But God has certainly potentially called them in a different direction to be a teacher, a mechanic, or something else.
Shawn (05:47):
I think of my own father with my parents’ upbringing. His opportunities were a little more limited. So as I remember, he would always say he knew how to move dirt and farm, so that’s what he did. But he wanted myself, my brother, my sister, to have more of an opportunity. So if we decided we wanted to fall in his footsteps, he’d love to have us, but also if we wanted to pursue a completely different career, that he was happy that he was able to give us that chance. And it takes you real humility as a parent, doesn’t it, to be okay with not having your kid follow in your own footsteps?
Matthew (06:26):
Yeah, it does. It does. We have to remember that our children don’t belong to us. They belong to God, and he has a unique.
Shawn (06:32):
Well, they belong to God first.
Matthew (06:33):
Yeah, absolutely. Yeah. So he has a unique plan for them, for each of them individually, and our role is to help them discover that and to prepare them for that calling and not impose our own dreams or ambitions or maybe the calling that the Lord has on our life unto them.
Shawn (06:54):
Yeah. Well, your fourth principle is to go against the trend in a culture that pushes everyone toward four year colleges. What does that look like?
Matthew (07:06):
Yeah, yeah, great question. So it kind of aligns with the progression of these topics. We need to make sure that we are matching the education needs to the career that the child wants. So the truth is, this isn’t 1995 anymore. Not everybody has to go to a traditional four year college or university. My wife Ann and I, right, my wife Ann, and I have five children and I can say with confidence that likely up to four of them may not go to a traditional college or university just given where their passions are right now. And so it’s really something to focus on and over the course of time, make sure that you’re observing and stewarding your children in that way. The one big beautiful Bill act that was recently signed actually expands on eligible education expenses for 529 plans to include career training and apprenticeship expenses. So even in law and legislation now we’re starting to see things expand when we think about educational expenses.
Shawn (08:12):
That’s fantastic. So there are more legitimate pathways than ever before.
Matthew (08:17):
Yeah, yeah, exactly. Community college, at least for the first couple years, can be a very viable and cost-effective option. Trade schools can be very low cost as well, relatively speaking, to get the required education needed. Research shows that there is a correlation between graduating college and lifetime income and wealth, but interestingly enough, I wasn’t able to find any studies that shows that there’s a correlation that’s strong between going to a top private university or an Ivy League school.
Shawn (08:50):
I’m personally not surprised by that just because of some of the stuff that been reading myself and other research, but I’m sure it’s surprising to many people that are watching or listening.
Matthew (09:02):
Yeah. Well, I think it’s very career dependent as well. So if you want to be in the medical field, then going to a particular university could be beneficial. If you want to work for one of the top law firms in New York City, going to Harvard Law or something like that definitely would be helpful from a networking perspective to get you that first job. It can be critical, but for most of us, ultimately what’s going to result in success is your ability to work hard, do great in the job that you have, and that’s regardless of what school you went to.
Shawn (09:33):
Yeah, and like you mentioned with the community college and things like that, one of the things that I learned before I went to college, because I have an older brother, is that you don’t have to do all of your school at the school you’re wanting to graduate from. So if there is something with the networking or whatever the requirement might be, doing clep tests and summer classes or AP classes in high school, going to the community college for, like you said, for the first couple years, really, it’s just as long as your transfers, you transfer your credits and everything, you finish the last year or two at whatever that school is. Well, guess what? Your degree, your diploma is going to show from that school, not the community college. And that still at the very least, saves a lot of money.
Matthew (10:19):
Exactly.
Shawn (10:19):
Well, this leads us into your fifth point about opportunity. There are some unique opportunities in today’s economy, aren’t there?
Matthew (10:29):
Yeah, absolutely. There’s a fascinating trend right now. The baby boomer blue collar workers are retiring in massive numbers, and that will continue for at least a little bit while longer. And there’s a lot of younger students who really just want to learn coding, AI development, et cetera.
Shawn (10:47):
I know Mike Rowe from Dirty Jobs, he’s been, he has been pushing for this thing, and I know he’s tickled pink we’re seeing more of this boom in people. Yes, I know there’s a lot of younger students, but there’s also this other movement of kids saying, “Well, yeah, I want to go do stuff with my hands,” which is great, but it definitely creates an interesting dynamic in the job market.
Matthew (11:15):
Yeah, exactly. AI is going to replace a lot of traditional desk jobs that the baby boomers have held, and it’s I think, a good solution for, “Oh, what are we going to do when they all retire?” But it’s going to be a lot more difficult for AI to replace jobs like plumbers, electricians, HVAC technicians, which are very much needed in Florida and Texas and for the south, healthcare workers, et cetera. They need a physical presence in these jobs. Problem solving with real world environments and human interaction that AI can’t replicate.
Shawn (11:48):
There would have to be significant progression and advancement in robotics coupled with AI for that kind of stuff to really get touched anytime soon. So there’s actually great opportunity for the younger generation in these fields.
Matthew (12:07):
Oh yeah. Oh yeah. Tremendous. Tremendous. Yeah. Many of these trades already offer excellent income potential, and that’s just in my opinion, likely to grow potentially job security, satisfaction of working with your hands and to solve real world problems. Plus, there’s a lot of these trade programs that can be completed in just a couple years, maybe even less and less of a cost than the traditional college or university for four years.
Shawn (12:32):
Alright, well finally, let’s talk about the practical side, saving for education. There’s point number six. What’s your approach here?
Matthew (12:42):
Many people were waiting for us to get to this topic. That’s probably what they thought it was going to be about from the beginning. The key principle here is really anything with investing, do it early and do it often. You might’ve remembered, we did a podcast a little bit ago on the power of compounding. That principle really applies to education savings. The earlier you can start, the more time you have for your money to potentially grow, that could be even before the child is even born, you start saving in some kind of vehicle.
Shawn (13:09):
I believe the requirements on that, especially for 529, you have to have at least one kid, but for the second and the third and however many you have, as long as you already have at least one, you can still technically open up that account or even transfer to the second kid kind of thing. Right?
Matthew (13:29):
That’s correct. Yeah. But there’s several options as well. Right. So 529 plans…
Shawn (13:33):
Yeah, sorry, I didn’t mean to get into stuff, but what are the vehicles that parents should consider?
Matthew (13:39):
Yeah, so 529 plans, one of them, UPMA accounts, uniform transfer or gift to minored accounts is another traditional use. Just a plain vanilla joint account in the parent’s name that’s earmarked for college education is something else that can be used.
Shawn (13:54):
Yeah, like you said, even before the child’s born, especially with the joint account with the parents, well the parents can open as many joint accounts as they want. So that is definitely getting an early start though, if you open up a joint account for college before your kid’s even born. But I imagine there are some considerations about financial aid, correct?
Matthew (14:14):
Oh yeah. It’s crucial, and this has been somewhat of a moving target over the past few years, but being mindful of the impact of FAFSA applications and financial aid is really important. The account that is in the child’s name or in the parent’s name or the grandparent’s name can significantly impact the financial aid calculations. So the individual needs to plan accordingly and understand what the rules are and understand that there’s the potential for the rules to change between now and when your child goes to college or whatever education they pursue.
Shawn (14:48):
What happens if there’s money left over in 529 plan?
Matthew (14:52):
Yeah. Yeah, great question. Hot off the press. So recent provisions make having to fine tune and be really exact with 529 savings. There’s less pressure around it now. So leftover assets in a 529 plan can be moved to another child’s 529 plan. You could simply change the beneficiary, which has been in the place for a while now, but recently you’re now able to, under certain conditions and you have to meet certain criteria, but it can be rolled over to a Roth IRA for that child. Again, there’s different requirements. So you want to do your research, but account has to be open for at least 15 years. The assets that are being rolled over have to be in the 529 plan for at least five years. You’re limited every year to IRA contribution limits. There’s a maximum, I think it’s $35,000 lifetime for this. So a lot of criteria to meet, but it’s an option that wasn’t there prior. And I think it’s just speaking to taking the pressure off of this aspect and freeing up some of the possibilities if either A, you happen to save too much to a 529 plan, or B, the child doesn’t use all the funds that were saved.
Shawn (16:09):
So there’s flexibility built into these plans that many parents don’t realize.
Matthew (16:12):
Absolutely. Yep.
Shawn (16:15):
Alright, well Matthew, let’s bring this home with some practical steps for our listeners and viewers on how they’re taking this that they can take with them this week.
Matthew (16:24):
So first thing would be to research your state’s education programs. Don’t assume that what’s available, you might be surprised to change frequently, more and more states, it seems like each year are adopting things like this. And so you don’t want to miss out on potential benefits that are available to you.
Shawn (16:39):
Okay. Well that sounds like something they can do this weekend.
Matthew (16:42):
They could, absolutely. Yeah. So the second would be spending intentional time observing your children. You’re probably already doing this, but do this now with this topic in mind. What are the things that they get engrossed in where they just lose track of time? What are they natural gravitating towards? Yeah, exactly. Exactly.
Shawn (17:02):
Yep. Gotcha. So what do they naturally gravitate towards and start documenting those observations.
Matthew (17:09):
Yeah. Make note of it.
Shawn (17:10):
Got it. And for parents who are already feeling pressure about college prep, what would you say to them?
Matthew (17:16):
Hey, just take it. Yeah, yeah. James 1:5 says, if we don’t know what to do, we should ask God. Right? So if there’s any kind of question, we need to take a step back, find a place of silence before the Lord and pray about it. What is God’s unique plan for each child that is under your care? A career counselor could be someone who you might want to consider scheduling some time with to have aptitude tests to help identify natural strengths and interests of your child if those strengths and interests aren’t obvious.
Shawn (17:50):
Alright. And what about the financial planning side?
Matthew (17:52):
Yeah, if you haven’t started yet, start now. Even if it’s a small dollar amount each month, meeting with a financial advisor can be very helpful, of course, to discuss whether a 529 plan, an UPMA, or other vehicles makes most sense for your goals and situation. And remember, the goal isn’t necessarily to pay for everything. It’s to be a really good steward of what the Lord has entrusted you with and give your children the best foundation possible.
Shawn (18:16):
Amen. Well, Matthew, this has been incredibly helpful. And let’s recap those six principles for stewarding children’s education, if you don’t mind.
Matthew (18:26):
Yeah, yeah, absolutely. So program awareness is first, know what benefits are in your state. Second, understand your child and be aware of their unique gifts that the Lord has given them. Third, forget your expectations. Let God’s plan take the precedence and lead. Fourth, go against the trend. Match your education to your child’s calling, not what culture and community pressure might influence you to do. The sixth thing is recognize the opportunities that are in today’s economy, especially in the skilled trades. And lastly, save early and often in the right vehicles for your family situation.
Shawn (19:02):
Well, the heart of all of this is really trusting God with our children’s futures while being faithful stewards of the resources he’s given us.
Matthew (19:11):
Yeah, yeah, yeah, exactly. When we approach the education with this biblical wisdom and from a biblical worldview, we’re not just preparing our children for their careers, but we’re preparing them to be faithful stewards of God’s kingdom, whatever that calling might be.
Shawn (19:28):
Matthew, thank you so much for today. And for those of you watching or listening, if you’d like to learn more about Christian Financial advisors or you have questions about educational planning, please visit our website www.christianfa.com. You can also call or text us at 830-609-6986 during business hours. And as always, thank you so much for joining us and God bless.
[DISCLOSURES]
* Investment advisory services offered through Christian Investment Advisors Inc dba Christian Financial Advisors, a registered investment advisor registered with the SEC. Registration as an investment advisor does not imply a certain level of skill or training. Comments from today’s show are for informational purposes only and not to be considered investment advice or recommendations to buy or sell any company that may have been mentioned or discussed. The opinions expressed are solely those of the hosts, Bob Barber and Shawn Peters, and their guests. Bob and Shawn do not provide tax advice and encourage you to seek guidance from a tax professional. While Christian Financial Advisors believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability.
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Click below to listen to Episode 233 – Supporting Success: Navigating Your Child’s Education
Supporting Success: Navigating Your Child’s Education
Discover six biblical principles to help you steward your child’s education wisely—without breaking the bank or missing God’s unique calling for their life.
More episodes >>
How can Christian parents wisely navigate the rising costs of education while honoring their child’s unique, God-given design? In this episode of Christian Financial Perspectives, Shawn and Matthew share six Biblical principles for stewarding your children’s education—from discovering their strengths to choosing the right savings strategies.
You’ll learn about state-funded programs, alternatives to traditional college paths, and smart financial tools like 529 plans. Whether you’re just starting to plan or already feeling the pressure, this episode offers practical guidance and encouragement to steward both your finances and your children’s futures with faith and wisdom.
HOSTED BY: Shawn Peters
CO-HOST: Matthew Barrovecchio
Mentioned In This Episode
Christian Financial Advisors
Website
Matthew Barrovecchio
Shawn Peters
Bible Verses In This Episode
PROVERBS 22:6
Train up a child in the way he should go, and when he is old he will not depart from it.
Want to ask a question about your specific situation? Schedule a complimentary 15 minute phone call.
SCHEDULE AN APPOINTMENTDid you enjoy this episode? Sign up for email updates and never miss an episode.
EPISODE TRANSCRIPT
Shawn (00:00):
Are you overwhelmed by the rising cost of education and wondering how to best prepare your children for their future without breaking the bank? Well, today we’ll explore six biblical principles for stewarding your children’s education from discovering their God-given talents to smart saving strategies that could save you tens of thousands of dollars. So let’s get some perspective. Welcome to Christian Financial Perspectives. I’m Shawn Peters, and today I’m joined by Matthew Barrovecchio. Matthew, we are tackling a topic that keeps many parents up at night how to wisely steward our children’s education.
Matthew (00:44):
Yeah, that’s right, Shawn. As Christian parents, we are in a position where we want to provide the best opportunities for our children while also being the best stewards of the resources that God has entrusted us with. And a key to approaching this educational process and decisions is not just with earthly wisdom, but also biblical principles.
Shawn (01:05):
And the great news is that there are more options and opportunities available today than ever before. Matthew, let’s start with what scripture tells us about training up our children.
Matthew (01:15):
Yeah, absolutely. So the foundation today is going to come from Proverbs 22:5, which says, “Train up a child in the way he should go, and when he’s old, he will not depart from it.”
Shawn (01:27):
I love that verse because it emphasizes training them in their way, not necessarily our way or society’s expectations.
Matthew (01:37):
Yeah, exactly. The verse is often misunderstood. It’s not saying train up child in the way that you want them to go, but train them according to their God-given design, their natural bent, and their unique calling. And when we do that, we’re going to continue to walk in the path throughout their life and help them along the way to fulfill what God has designed them to fulfill and be.
Shawn (01:59):
Yeah, that’s such an important distinction and it really sets the stage for our discussion today. We’re not just talking about funding education, we’re talking about partnering with God to discover and develop each gifts he’s placed in each of our children.
Matthew (02:15):
Yeah, absolutely. And so we’re going to do so through a few different principles. There’s six of them that we’re going to dive into. The first one here I have labeled as program awareness. So many parents don’t realize at the high school level and below there are significant education benefits that the states offer today. It’s not just about public school funding anymore.
Shawn (02:38):
Okay. So what kind of programs are we talking about?
Matthew (02:42):
Yeah, so many states now offer assistance for homeschooling, for co-ops, private schools, et cetera. For example, there are states that have tax credits and deductions or for education, some of them, Illinois, Indiana, Louisiana, Iowa, Oklahoma, Arizona offers scholarships up to I think $7,000 per student. And the great state of Florida has programs that redirect education funds from the state, and currently it’s about $8,000 per student per year.
Shawn (03:17):
Wow. That’s substantial. So parents really need to research what’s available in their specific state?
Matthew (03:24):
Yeah, absolutely. The programs differ from state to state, but they can significantly reduce the burden of providing quality education for your children, especially if you’re doing a homeschooling route or something that’s maybe not the norm via public school and not doing it. It’s like you’re leaving money on the table if you don’t investigate what your state does offer and try to take advantage of it.
Shawn (03:46):
And that leads us perfectly to your second principle, child awareness. Talk about what that means.
Matthew (03:54):
Yeah. Child awareness is about investing the time and attention to truly understand and know what your child’s strengths and God-given passions are. It’s not just about academic subjects, but understanding how God has designed them and wired them. Do they tend to be more hands-on learners? Do they excel in the more creative aspects of life? Are they natural problem solvers and all things to observe and consider?
Shawn (04:22):
And this requires intentional observation over time, doesn’t it?
Matthew (04:27):
Yeah, precisely. Yeah. We need to watch them play. We need to know what energizes them. We need to notice what makes them excited and what comes naturally to them versus things that they struggle with. Some of them naturally are entrepreneurs. The child that wants to do the lemonade stand several times in the summer, others are caregivers, others are builders, so on and so forth. Part of our job is to really discover these and nurture them, these God-given inclinations that they have.
Shawn (04:57):
Which brings us to point number three, and this might be challenging for some parents. Forget your expectations.
Matthew (05:04):
Yeah, exactly. So it’s probably one of the hardest ones for parents to adopt, especially in American culture and especially from an earthly perspective. But we need to have a plan that is according to the type of the career that the child wants and that the child’s passions aligned with and not pressure them down a path that we as parents want for them. So maybe someone’s a doctor and has always envisioned their child following in their footsteps, taking over the family business and sharing that passion with them. But God has certainly potentially called them in a different direction to be a teacher, a mechanic, or something else.
Shawn (05:47):
I think of my own father with my parents’ upbringing. His opportunities were a little more limited. So as I remember, he would always say he knew how to move dirt and farm, so that’s what he did. But he wanted myself, my brother, my sister, to have more of an opportunity. So if we decided we wanted to fall in his footsteps, he’d love to have us, but also if we wanted to pursue a completely different career, that he was happy that he was able to give us that chance. And it takes you real humility as a parent, doesn’t it, to be okay with not having your kid follow in your own footsteps?
Matthew (06:26):
Yeah, it does. It does. We have to remember that our children don’t belong to us. They belong to God, and he has a unique.
Shawn (06:32):
Well, they belong to God first.
Matthew (06:33):
Yeah, absolutely. Yeah. So he has a unique plan for them, for each of them individually, and our role is to help them discover that and to prepare them for that calling and not impose our own dreams or ambitions or maybe the calling that the Lord has on our life unto them.
Shawn (06:54):
Yeah. Well, your fourth principle is to go against the trend in a culture that pushes everyone toward four year colleges. What does that look like?
Matthew (07:06):
Yeah, yeah, great question. So it kind of aligns with the progression of these topics. We need to make sure that we are matching the education needs to the career that the child wants. So the truth is, this isn’t 1995 anymore. Not everybody has to go to a traditional four year college or university. My wife Ann and I, right, my wife Ann, and I have five children and I can say with confidence that likely up to four of them may not go to a traditional college or university just given where their passions are right now. And so it’s really something to focus on and over the course of time, make sure that you’re observing and stewarding your children in that way. The one big beautiful Bill act that was recently signed actually expands on eligible education expenses for 529 plans to include career training and apprenticeship expenses. So even in law and legislation now we’re starting to see things expand when we think about educational expenses.
Shawn (08:12):
That’s fantastic. So there are more legitimate pathways than ever before.
Matthew (08:17):
Yeah, yeah, exactly. Community college, at least for the first couple years, can be a very viable and cost-effective option. Trade schools can be very low cost as well, relatively speaking, to get the required education needed. Research shows that there is a correlation between graduating college and lifetime income and wealth, but interestingly enough, I wasn’t able to find any studies that shows that there’s a correlation that’s strong between going to a top private university or an Ivy League school.
Shawn (08:50):
I’m personally not surprised by that just because of some of the stuff that been reading myself and other research, but I’m sure it’s surprising to many people that are watching or listening.
Matthew (09:02):
Yeah. Well, I think it’s very career dependent as well. So if you want to be in the medical field, then going to a particular university could be beneficial. If you want to work for one of the top law firms in New York City, going to Harvard Law or something like that definitely would be helpful from a networking perspective to get you that first job. It can be critical, but for most of us, ultimately what’s going to result in success is your ability to work hard, do great in the job that you have, and that’s regardless of what school you went to.
Shawn (09:33):
Yeah, and like you mentioned with the community college and things like that, one of the things that I learned before I went to college, because I have an older brother, is that you don’t have to do all of your school at the school you’re wanting to graduate from. So if there is something with the networking or whatever the requirement might be, doing clep tests and summer classes or AP classes in high school, going to the community college for, like you said, for the first couple years, really, it’s just as long as your transfers, you transfer your credits and everything, you finish the last year or two at whatever that school is. Well, guess what? Your degree, your diploma is going to show from that school, not the community college. And that still at the very least, saves a lot of money.
Matthew (10:19):
Exactly.
Shawn (10:19):
Well, this leads us into your fifth point about opportunity. There are some unique opportunities in today’s economy, aren’t there?
Matthew (10:29):
Yeah, absolutely. There’s a fascinating trend right now. The baby boomer blue collar workers are retiring in massive numbers, and that will continue for at least a little bit while longer. And there’s a lot of younger students who really just want to learn coding, AI development, et cetera.
Shawn (10:47):
I know Mike Rowe from Dirty Jobs, he’s been, he has been pushing for this thing, and I know he’s tickled pink we’re seeing more of this boom in people. Yes, I know there’s a lot of younger students, but there’s also this other movement of kids saying, “Well, yeah, I want to go do stuff with my hands,” which is great, but it definitely creates an interesting dynamic in the job market.
Matthew (11:15):
Yeah, exactly. AI is going to replace a lot of traditional desk jobs that the baby boomers have held, and it’s I think, a good solution for, “Oh, what are we going to do when they all retire?” But it’s going to be a lot more difficult for AI to replace jobs like plumbers, electricians, HVAC technicians, which are very much needed in Florida and Texas and for the south, healthcare workers, et cetera. They need a physical presence in these jobs. Problem solving with real world environments and human interaction that AI can’t replicate.
Shawn (11:48):
There would have to be significant progression and advancement in robotics coupled with AI for that kind of stuff to really get touched anytime soon. So there’s actually great opportunity for the younger generation in these fields.
Matthew (12:07):
Oh yeah. Oh yeah. Tremendous. Tremendous. Yeah. Many of these trades already offer excellent income potential, and that’s just in my opinion, likely to grow potentially job security, satisfaction of working with your hands and to solve real world problems. Plus, there’s a lot of these trade programs that can be completed in just a couple years, maybe even less and less of a cost than the traditional college or university for four years.
Shawn (12:32):
Alright, well finally, let’s talk about the practical side, saving for education. There’s point number six. What’s your approach here?
Matthew (12:42):
Many people were waiting for us to get to this topic. That’s probably what they thought it was going to be about from the beginning. The key principle here is really anything with investing, do it early and do it often. You might’ve remembered, we did a podcast a little bit ago on the power of compounding. That principle really applies to education savings. The earlier you can start, the more time you have for your money to potentially grow, that could be even before the child is even born, you start saving in some kind of vehicle.
Shawn (13:09):
I believe the requirements on that, especially for 529, you have to have at least one kid, but for the second and the third and however many you have, as long as you already have at least one, you can still technically open up that account or even transfer to the second kid kind of thing. Right?
Matthew (13:29):
That’s correct. Yeah. But there’s several options as well. Right. So 529 plans…
Shawn (13:33):
Yeah, sorry, I didn’t mean to get into stuff, but what are the vehicles that parents should consider?
Matthew (13:39):
Yeah, so 529 plans, one of them, UPMA accounts, uniform transfer or gift to minored accounts is another traditional use. Just a plain vanilla joint account in the parent’s name that’s earmarked for college education is something else that can be used.
Shawn (13:54):
Yeah, like you said, even before the child’s born, especially with the joint account with the parents, well the parents can open as many joint accounts as they want. So that is definitely getting an early start though, if you open up a joint account for college before your kid’s even born. But I imagine there are some considerations about financial aid, correct?
Matthew (14:14):
Oh yeah. It’s crucial, and this has been somewhat of a moving target over the past few years, but being mindful of the impact of FAFSA applications and financial aid is really important. The account that is in the child’s name or in the parent’s name or the grandparent’s name can significantly impact the financial aid calculations. So the individual needs to plan accordingly and understand what the rules are and understand that there’s the potential for the rules to change between now and when your child goes to college or whatever education they pursue.
Shawn (14:48):
What happens if there’s money left over in 529 plan?
Matthew (14:52):
Yeah. Yeah, great question. Hot off the press. So recent provisions make having to fine tune and be really exact with 529 savings. There’s less pressure around it now. So leftover assets in a 529 plan can be moved to another child’s 529 plan. You could simply change the beneficiary, which has been in the place for a while now, but recently you’re now able to, under certain conditions and you have to meet certain criteria, but it can be rolled over to a Roth IRA for that child. Again, there’s different requirements. So you want to do your research, but account has to be open for at least 15 years. The assets that are being rolled over have to be in the 529 plan for at least five years. You’re limited every year to IRA contribution limits. There’s a maximum, I think it’s $35,000 lifetime for this. So a lot of criteria to meet, but it’s an option that wasn’t there prior. And I think it’s just speaking to taking the pressure off of this aspect and freeing up some of the possibilities if either A, you happen to save too much to a 529 plan, or B, the child doesn’t use all the funds that were saved.
Shawn (16:09):
So there’s flexibility built into these plans that many parents don’t realize.
Matthew (16:12):
Absolutely. Yep.
Shawn (16:15):
Alright, well Matthew, let’s bring this home with some practical steps for our listeners and viewers on how they’re taking this that they can take with them this week.
Matthew (16:24):
So first thing would be to research your state’s education programs. Don’t assume that what’s available, you might be surprised to change frequently, more and more states, it seems like each year are adopting things like this. And so you don’t want to miss out on potential benefits that are available to you.
Shawn (16:39):
Okay. Well that sounds like something they can do this weekend.
Matthew (16:42):
They could, absolutely. Yeah. So the second would be spending intentional time observing your children. You’re probably already doing this, but do this now with this topic in mind. What are the things that they get engrossed in where they just lose track of time? What are they natural gravitating towards? Yeah, exactly. Exactly.
Shawn (17:02):
Yep. Gotcha. So what do they naturally gravitate towards and start documenting those observations.
Matthew (17:09):
Yeah. Make note of it.
Shawn (17:10):
Got it. And for parents who are already feeling pressure about college prep, what would you say to them?
Matthew (17:16):
Hey, just take it. Yeah, yeah. James 1:5 says, if we don’t know what to do, we should ask God. Right? So if there’s any kind of question, we need to take a step back, find a place of silence before the Lord and pray about it. What is God’s unique plan for each child that is under your care? A career counselor could be someone who you might want to consider scheduling some time with to have aptitude tests to help identify natural strengths and interests of your child if those strengths and interests aren’t obvious.
Shawn (17:50):
Alright. And what about the financial planning side?
Matthew (17:52):
Yeah, if you haven’t started yet, start now. Even if it’s a small dollar amount each month, meeting with a financial advisor can be very helpful, of course, to discuss whether a 529 plan, an UPMA, or other vehicles makes most sense for your goals and situation. And remember, the goal isn’t necessarily to pay for everything. It’s to be a really good steward of what the Lord has entrusted you with and give your children the best foundation possible.
Shawn (18:16):
Amen. Well, Matthew, this has been incredibly helpful. And let’s recap those six principles for stewarding children’s education, if you don’t mind.
Matthew (18:26):
Yeah, yeah, absolutely. So program awareness is first, know what benefits are in your state. Second, understand your child and be aware of their unique gifts that the Lord has given them. Third, forget your expectations. Let God’s plan take the precedence and lead. Fourth, go against the trend. Match your education to your child’s calling, not what culture and community pressure might influence you to do. The sixth thing is recognize the opportunities that are in today’s economy, especially in the skilled trades. And lastly, save early and often in the right vehicles for your family situation.
Shawn (19:02):
Well, the heart of all of this is really trusting God with our children’s futures while being faithful stewards of the resources he’s given us.
Matthew (19:11):
Yeah, yeah, yeah, exactly. When we approach the education with this biblical wisdom and from a biblical worldview, we’re not just preparing our children for their careers, but we’re preparing them to be faithful stewards of God’s kingdom, whatever that calling might be.
Shawn (19:28):
Matthew, thank you so much for today. And for those of you watching or listening, if you’d like to learn more about Christian Financial advisors or you have questions about educational planning, please visit our website www.christianfa.com. You can also call or text us at 830-609-6986 during business hours. And as always, thank you so much for joining us and God bless.
[DISCLOSURES]
* Investment advisory services offered through Christian Investment Advisors Inc dba Christian Financial Advisors, a registered investment advisor registered with the SEC. Registration as an investment advisor does not imply a certain level of skill or training. Comments from today’s show are for informational purposes only and not to be considered investment advice or recommendations to buy or sell any company that may have been mentioned or discussed. The opinions expressed are solely those of the hosts, Bob Barber and Shawn Peters, and their guests. Bob and Shawn do not provide tax advice and encourage you to seek guidance from a tax professional. While Christian Financial Advisors believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability.
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