Though getting your kids ready for college is an academic challenge, many parents also struggle with the financial responsibilities that come with higher education. It is no secret that a college education has become an important part of preparing for a career in today’s economy. While it is a significant expense, it is a good investment. Fortunately, college expenses are something you can prepare for well in advance so the decision doesn’t have to be such a challenge.
Here Are Some Ways You Can Plan On College Expenses And Start Saving Now
Proactive Saving and Less Borrowing
College might seem like it is years away for your children, but that time will fly by before you know it. Take advantage of accounts and savings strategies that will have compounded growth over those years. You should also take this time to develop the habit of borrowing less and saving more in areas that don’t have anything to do with college. The more you can tightly control your budget over the next few years, the better off you will be when those college tuition bills come due. Start saving in every area you can. Saving $100 a month for a year, multiplied by 12 is $14,400. This doesn’t include any interest, either.
Look Into 529 Benefits
Many are looking into the use of 529 plans a way to invest for college attendance. These plans offer significant tax advantages and beneficiary flexibility. While any contributions can’t be deducted from your federal tax filings, there are some plans that can have deduction benefits at the sate level. As college expenses have increased, there has been a correlating rise in 529 plan assets along with it.
Earmark Your Extra Income
For those looking at college tuition costs, you realize you aren’t going to get there without serious financial help. This is the case when you are trying to avoid student loans. Through work bonus money, tax refunds, inheritance money, or side jobs, you should start your college fund now. Make the decision to earmark extra money or income for college tuition. You can put these funds into your 529 and create a better return. After you are used to paying for daycare, simply redirect that expense into college savings.
Teach Your Kids to Save
There are several ways to get your kids involved in the savings process. All those electronics you have bought over the years can be turned into cash at ecoATM, through yard sales, or sold through eBay. What is ecoATM? It’s a buyback program for used phones and other devices. Not only does it keep used electronics from getting tossed into a landfill, but the company also pays you to turn in your device. Little choices like, as well as finding a part-time job during high school, will help make your children responsible for their education. Even if you want to take care of the cost for them, your child will value their efforts and have a sense of accomplishment when they realize they truly did earn their education.
Let Friends and Relatives Help
Parents that really want to make sure their kids get the education they need have opted for friends and families to make college savings contributions rather than material gifts on birthdays and holidays. Grandparents can make contributions through the 529 or pay the tuition directly to the school. This can be financially beneficial for the grandparent’s gift and estate tax liabilities.
With the right attitude towards savings and spending, you can make sure your child has the funds needed to attend college. Start the college fund now, letting your money compound and grow over the years.