Having a plan for the future is a good thing, especially plans that concern finances and the best way to reach your financial goals are by saving money. The good thing about saving is that in the end, it gives you money security. However, saving it’s not a walk in the park, you’ll have to sacrifice a lot to meet your savings targets.
Having a kid is a blessing and having plans for that kid is a great thing. One of these great plans is securing your kids’ education. You will realize that in most countries, college student’s loans are acquired through government institutions. This later becomes a burden when one has to repay, especially if you have a lower-income job.
Saving college funds for your kid can guarantee him/her a good and ample learning time in college. For you to start saving college funds you’ll have to employ proper planning. The following tips can help you on how to do so.
1. Choose an account that earns interest and is not taxable during withdrawal
If you are a parent, you’ll have to research to determine the best account for you to save for your kid college fund. The most likely account that is recommended for education Is a 529 account and Education Savings Account (ESA). These accounts enable you to earn interest and they are not taxable when you want to withdraw. This means that in the long run, you will earn extra cash depending on the period you had saved the funds. Another advantage of this account is the 529 plan; it is operated by the state and besides exempting you from paying taxes, it has a higher limit to allow you to save as much as you want to meet your financial educational needs. Remember the earlier you start saving for college funds the faster you will manage to meet your goals.
2. Make use of available scholarship, sponsorship, and bursaries
Make use of scholarships, bursaries, and sponsorships that are available in your current child’s grade; after all this is free money. By doing this the money that you could have spent on that grade/term, you can use it to save your kids’ college fund and also help you meet your target faster.
3. Project for a college that you can afford
Unless your kid earns a sponsorship or scholarship go for the ones you can afford. You can visit any of your college preferences, look at the current tuition fee, try to see how the fee rises annually, and generate an approximate figure you are likely to pay when your kid is about to join the college. This will help your strategies on how much you’ll be saving before your child attends college. Also make sure you check for other college expenses such as dormitory fees, food expenses’, school trips, and book costs and include them in your budget.
4. Know when to start saving
Financial gurus advise that you should not scrap your retirement aid to pay for your kids’ college funds and that is why you will have to choose whether your kid should attend local or out-of-state college or whether private or public university.
College funds can be overwhelming, but we can help get you there. Contact Eastex CU to get the ball rolling!