Smart Ideas for Saving for College?

Answer 1

If you have kids, you are probably more than a little bit concerned about how you will begin saving for college. It is essential for you to do so, however; college tuition seems to be increasing on a regular basis, and the cost of textbooks and other college-related supplies aren't anything to scoff at either. Since you probably don't want your children to start out their adult lives with a lot of debt from student loans, it is a smart idea to start saving for college while your little ones are young. Fortunately, there are a few smart tips to follow when saving for college.

Open a 529 Account

Many parents have never heard of a 529 account, but many experts agree that it is one of the smartest ways to begin saving for college. One of these accounts allow you to contribute after-tax money from your paycheck, and you don't have to pay taxes on the savings if you use the money for college tuition in the future.

Consider Prepaid Tuition Options

Although a lot of parents don't realize it, there are plans in place that allow you to pay tuition at today's rates for your child to use in the future. You can use your prepaid tuition at any school in the country, regardless of if the school is public or private, making this an excellent option for parents who want to start saving for college early. You never know how much tuition will cost when your child grows up and is ready to go to college, but you could save a bundle if tuition costs continue to increase at the rate that they have in recent years.

Options Offered By Your Employer

Many employers offer savings accounts for their employees to use strictly for college tuition, and you can have a portion of your paycheck automatically transferred to one of these accounts. Some employers even offer scholarships for the children of their employees; even if the scholarship isn't much, every little bit counts when it comes to saving and paying for college.

Encourage Family Members and Your Children

If your child already has everything that he or she wants or needs, consider asking family members to contribute to your child's college fund instead of springing for toys or electronics that your little one doesn't need. Also, consider encouraging your child to contribute a portion of any money that he or she earns or receives as a gift to the college fund.