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How To Save For College Return to Finance
By LifeAdviceSite.com
 Saving for college can seem like a huge, insurmountable challenge for many parents, but it doesn't have to be. Starting early is key, and believe me, it's never too soon to start. Small, simple strategies will add up big time through the years until your child is ready to attend college.
How early should you start? Well, personally, I started saving for my children's college education before they were born. In fact, before I'd even met the father of my children, when I was in college myself - that's when I started saving for the future of my children. When I first started attending college, I paid for each class as I went, working and attending school both part-time. It was a challenge. I felt my focus was constantly split between the work and school, and I found myself wishing that my own parents had had the foresight to begin a college fund when I was born so I could focus more on the education portion of school rather than the finances of school. After a few years of struggling, I finally took out a couple of student loans and applied to complete my degree full-time in a year and a half. Now, three years later I'm still paying off those student loans.
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It's not that it's such a terrible thing to have student loans. If there's any reason to go into debt, education is probably the most noble, and anyone who makes it in this world by working their way through school should be commended and congratulated. In fact, as a matter of practice and general good parenting, I'd recommend all parents get their children involved in paying for their education, and teach them the value therein, rather than just paying for everything and denying them this important financial lesson. |
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Education is an expensive burden, however, and any help parents can provide is key. Start with some of these basic strategies and watch your college fund grow effortlessly.
Savings account:
Open a high-yield savings account for each child. Have the account linked to your checking account or whatever account which you use to pay your monthly bills. As soon as your child is born (or before!) set up an automatic transfer which will deposit a specified dollar amount each week or each month into that account. Do whatever you can afford. If you can do $10 a week, that is great. If you can only do $25 dollars a month, that's still better than nothing. After 18 years, adding in compounding interest, that's going to be a pretty good chunk of change.
529 college savings plan:
A 529 savings plan allows the account holder to invest money in a variety of stocks and bonds, mutual funds, age-based portfolios, and money market funds. These funds can be withdrawn without penalty to pay for college related expenses. 529 plans also include a pre-paid tuition plans known as a "qualified tuition plan" which allows the purchase of credit which can be applied toward future tuition at participating colleges and universities Click for more information about 529 college savings plans
http://www.sec.gov/investor/pubs/intro529.htm
UPromise:
Upromise and other programs which operate in a similar manner are just fantastic. Participating sponsors agree to donate a certain percentage of proceeds from the sales you transact with them, so you earn money back. You set up an account at Upromise and link up all of your credit and debit cards. As you shop and purchase items within the UPromise network, like a certain brand of toilet paper or cereal bar, or eat in a specific restaurant and gas up the car at a particular gas station brand, you get a few cents deposited into your Upromise account. Upromise gives you a list of participating sponsors so you can tailor your choices to maximize your savings, but really you don't have to work that hard at it. Just live your life and shop as you normally do, and when you hit one of the Upromise participants, you'll automatically get a certain percentage back into your Upromise account. You can also link up friends and family members so their savings are also contributed into your child's Upromise account. With moderate spending, you can earn $50 or more a year. It won't pay anyone's way through school, but every little bit helps, and this is free money which you earn for living, shopping and dining like you normally do. |
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Finance Saving for College