As a parent, one of your biggest dreams for them is to attend college. Since you attended school, the price of tuition has skyrocketed. Every day there are new articles and stories warning how expensive college is and the amount of debt that students are in because of it. This is why it is important to start saving for your child’s education as quickly as possible. However, this is much easier said than done, but there are simple steps that you can take:
Calculations First
Before you can start saving, you need to know the big number first. Tuition is only half the battle when it comes to a college education. It’s important for you to also account for the book, room and board, and even transportation costs. If you have more than one child, you need to factor their education in as well. Think about whether you’ll be able to afford public, private, community and in- and out-of-state schools. Also, consider if you would be eligible for financial aid. Think of all these costs and their factors before creating the budget.
Understand 529 Plans
The 529 plans allow adults to save for college in the name of a child. There are excellent tax benefits to this approach including the investment earnings from the account growing free of federal taxes when they are used for qualifying college expenses. These accounts can be opened for students by people who are not the parents as well and can also be used for multiple students if funds have not run out.
Start Early
It is never too early to start saving for your children’s education. Putting money into their education fund should be as regular of an occurrence as paying your bills. If you can, have automatic payments going into the account monthly from the time they are born. Starting too late can mean sacrificing and education from a top-ranked school that you cannot afford. Try to set aside $25-100 with every paycheck. Over the span of 18 years, it can go along way in funding their education.
