Are you trying to figure out how to save for college now? The cost of education continues to rise each year. Take a few moments to read how you can start to save for college to help off-set the costs in the long-run.
“How are we going to pay for college?” That is the thought that goes through many parents’ minds when they have a new baby. More than likely, the thought has crossed your mind more than once. It can be a frightening thought since college costs so much these days, and it is only getting more expensive as the years go by. Every parent wants their child to get a good education, so that means there is no question, college is a must. After spending money on diapers, wipes, clothing, school supplies, mortgage payments, utilities and all the other endless costs that arise, where is that extra money supposed to come from to pay for college? The good news is that there are options that will allow you to save for college by setting aside de money to fund your child’s college education without going broke.
Ways To Save For College:
A 529 plan is a savings account specifically for college that is sponsored by each separate state. It only takes $25 to open a 529 savings plan, and you can put as little as $25 a month into that account. Obviously, the more money you put into the account each month, the better return you will earn by the time your child is ready for college.
These savings plans are tax-deferred, and when it is time for your child to start college, you can withdraw the money to cover all college expenses such as tuition, books, room and board and other school supplies without having to worry about paying taxes on that money right then. Many states also offer extra tax incentives when you choose to use a 529 savings plan for college. Each state’s tax incentives differ, so you will need to check the info for your particular state to find out more about it.
The disadvantage to using this method to save for college is if, for some reason, your child does not go to college, you may end up having to pay income tax on that money plus an additional penalty.
Do It Yourself
If you choose that a 529 plan will work not for you, there is always the option of opening a regular savings account and depositing money into it on your own. Many banks offer their own version of a college savings account, so you might want to shop around and see what kind of deals you can find. The best way to ensure that money gets put into that account every month (or week, however you want to set it up) is to have the money taken directly from your paycheck and direct deposited into that account. This way, you will not even miss the money, and you will not have to think about it or remember to make that deposit.
Also, do not forget about scholarships, federal grants, and other forms of financial aid. There is no reason why you should feel the need to foot the entire bill for your child’s college education. Many college offer options for your child to participate in a work-study program or you can have your child work a part-time job when they become old enough to begin putting away small amounts of their own money to help pay for their college education. Not only will it help withoff-set the cost, but it will teach tour child the importance of working hard for a goal and helping to contribute to their own education to save for college.
More Ways to Save Money:
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