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College is an exciting time for young adults. It’s a period of new experiences, new friends and new career prospects. However, college is also an expensive time.
According to The College Board, tuition and related costs for a year of undergraduate education averaged $20,770 for private colleges, $9,970 for state schools, and $21,330 for private universities in 2018-19.
That’s why many parents are concerned about how they can help their child pay for college or put away money so they can attend later on. Luckily there are several ways you can save money to fund your child’s future education so you don’t have to take out student loans or take out a second mortgage on your home just to send your child to school.
Here are some ideas on how you can fund your kid’s future education with less stress:
Set Aside A Weekly Or Monthly Amount
One of the best ways to save for college is to put aside a small amount each week or month. If you don’t have a lot of spare cash lying around, setting up a small payment every week or month is a great way to start saving up over time.
If you have a young child, you may want to start saving now so they have time to grow into the money. If your child is a bit older, you may want to save up enough so they can pay for the entire cost of attendance on their own. If you have a child in high school, you can start putting money in a 529 plan, which is a tax-advantaged savings account designed specifically to help families save money for college.
You won’t pay any taxes on the money you put into 529 plan, and there are no income restrictions. There are also no minimum contribution requirements, so you can put away as little as $25 a month if you want to.
Contribute To Your Child’s College Fund
If you want to contribute to your child’s college fund, start saving as early as possible. Even small amounts saved when a child is very young can grow into a sizeable amount by the time they are ready to go to college. If you have a child and a partner, you can put aside money in each of your names, which will help you save more.
If you have one child, you can put the money in the name of that child. If you have more than one child, you can put the money in a joint account. If you have a single child, putting the money into a 529 plan is a good idea. That way, the money will grow tax-free, and you won’t have to pay any taxes on it when you withdraw it later on.
Don’t Stop Contributing To Your Own Retirement Savings
While it’s important to start saving for your child’s future, it’s just as important to make sure you don’t neglect your own retirement savings.
Many experts recommend contributing 10% of your income to your retirement savings and then putting the rest into a college savings account for your child. That way, you help your child prepare for the future and set them up for success. You also ensure that you don’t run out of money when you retire. If you don’t have a retirement savings account set up yet, start one as soon as possible.
You can go through your employer or open an individual retirement account (IRA) on your own. If you already have a retirement account, you can increase the amount you’re saving.
Take Out A Loan Or Get A Co-Signer
If you have a child who is ready to go to college but you don’t have any money saved, you can always take out a student loan. You can also get a co-signer to help you get a lower interest rate on a loan. There are many things to consider before taking out a loan or getting a co-signer:
– What kind of loan is best for you? Federal or Private? What are the terms and conditions?
– What will be the interest rate on your loan? Will it affect your ability to get a loan again in the future?
– How long will it take you to pay off the loan?
– Can you afford to pay back the loan?
– Does your child have other financial aid options available to them?
– What other sources of funding are available?
Find Out Exactly How Much You Can Save And What You Need
Before you start saving money, you should know how much you need to save and what your child’s future education will cost. There are several ways you can find out the cost of college. You can look it up online, talk to your child’s guidance counselor or ask your child what college they want to go to.
If you don’t know how much your child’s education is going to cost, you won’t know how much you need to save. If you don’t know how much you need to save, it will be harder to start saving money.
Bottom Line
College is an exciting time for young adults, but it’s also an expensive time. That’s why it’s important to start saving money while your child is young so they have time to grow into the money. You can set aside a small amount each week or month, contribute to your child’s college fund, or start looking into other ways to save money for your child’s education.
Whether you want to attend a local community college, earn a trade certificate, or study at a prestigious university, you can do it. It just takes some work and determination. With these tips, you can make sure your child has the best education possible and doesn’t have to worry about funding it.
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