If someone told you that “yes, you can save money for college”, would you agree? Well, the importance of saving early lays a significant marker down the road of a child’s future. When it comes to saving for college, every decision that you make now is a step toward their financial future. Think about it about this way: each dollar you save now is a dollar you won’t have to borrow in the future. If you’re like most parents, you want your child’s education to be a given part of their future.
Over time, the journey toward saving your money can translate into saving smart. Deciding on the route to take for a child’s future education can equip you with the necessary knowledge about rising college costs, the benefits of saving and the ways to curb your debt and start investing more.
- Get an estimate of what college will cost by using the www.finaid.org/calculators.
- Know that every penny saved makes a difference in your child’s higher education.
- Save now by opening an interest-earning savings account vs. paying interest for a loan later.
These are strategies that can become resources that you can enlist for your child’s higher education. More experts are saying that the total price of paying for college can be decreased by making smart decisions. With numerous options available for parents to start saving and investing in a child’s education, there is opportunity there. Here are some ways to start saving for your child’s education, and tips to help them fund their education.
Look into 529 college plans
One popular method and investment vehicle toward your child’s higher education is the 529 savings plan. The 529 plan (known as qualified tuition plans) offers a tax-free withdrawals toward qualified education expenses such as college tuition and books. This saving plan functions in the same way that the Roth IRA functions, by ensuring that your contributions are taxed, but the earnings that you receive will not be taxed.
Pay yourself first
Analyze your spending to see if there’s anything you can do to cut expenses or increase your savings. Starting early and putting away just a small amount of money are the first steps in taking control of your money. Then, continue forward by setting up a automatic transfer from your savings or checking account into the 529 plan. Finding these simple ways to save and make cuts can really add up over time.
Enroll in Upromise
Register for a free account at Upromise by Sallie Mae to earn cash back for college. Your Upromise account can also be linked to your 529 college savings account to make your money more accessible. To discover how it works, simply click on one of their links to start earning cash back instantly on a percentage of your purchase.
For additional earnings, you can apply for a Upromise credit card, where you can earn cash values on certain eligible purchases, including 4 percent at participating restaurants, 3 percent on gas at eligible locations, 2 percent at participating movie theaters and 1 percent on everything else.
In short, it’s never too early or too late to make the move on saving early for your child’s education. Especially when it comes to the actual cost of college, having a plan in motion and consistently sticking to it is the best way to go. Make sure to utilize the resources around you by speaking with a qualified financial planner if necessary about your choices, and find investments that make sense for the long run.