By now it is apparent money does not grow on trees. And, as years progress prices increase. Paying for all or part of your children’s college, unless they attend a community college or receive a substantial scholarship, will not be easy.
It is never too early to start a college fund, and with these quick tips, you will be well on your way to savings.
1. Open A 529 Account
Because saving for college can be nearly as expensive as saving for retirement, parents should start saving money into a 529 college savings plan as early as possible. The earlier the money is deposited, the more time it has to collect interest and grow.
While parents can open any type of account or C.D. to place their savings in, using a 529-college savings plan is a tax-free account. When the money accumulates or is withdrawn, parents do not need to worry about impending taxes.
2. Cut Back On The Extras
Saving a couple of hundred dollars a month toward your child’s fund does not have to break the bank. First of all, it is important to set a number you are certain you can spare. It does not have to be the same each month, but it is generally easier to remember if it is.
When there is extra cash lying around, it is tempting to use it on superfluous items that you and your family do not really need. It is all about the little things. Instead of paying for a car wash, use a hose and soap at home. Cook more; eat out less. If you are grabbing take-out, do not pay for delivery.
Any extra money you can save by making painless changes is extra to save.
3. Put Out A Jar
Younger children might not understand the necessity of saving for college, but older kids will. Emphasize the importance of saving for college, why it needs to be done early, and the correlation between saving more in the present and not having to take out student loans in the future.
Place a jar or can in a visible location where spare change loose bills can de deposit easily. Each month, take that amount and add it to the 529-college savings plan.
4. Stop Spending What You Don’t Have
Many people are guilty of spending more than they have, which leaves them with rampant credit debt.
If in serious debt, your first priority should be to get that under control before you start looking for ways to save. Make headway with your debt by making large payments. Or, in some cases, it is cheaper to take out a second mortgage loan or a title loan from a company like TitleMax to pay off the credit loan in full. Sometimes it is less expensive in the long run to use a cheaper loan to pay off a more expensive loan.
Break out the piggy banks and begin a savings plan for your child’s attainment of higher education.