College tuition prices have exploded over the last couple of decades so It’s Never Too Early To Save For College Tuition!
The cost to get a degree has put it out of the reach of many deserving students.
And the ones that decide to take out student loans are burdened for decades.
Add to that, many families are unable to help their children pay for college to make it easier on them to start their lives.
Which is why it pays to have a plan that starts as early as possible so there is no need to stress about how to pay for university when the time comes.
There are more options than people realize that can do a tremendous job in setting children up for a degree that they won’t be burdened with for decades.
In this article, we will explore many of the options available to you.
Before they’re Teenagers
You don’t need to start contacting College Admissions Consulting specialists while your kids are in diapers, but you do need to kind of figure out what direction they could be heading while they are just about teenagers.
How much money you’re going to need is going to be mostly determined by which tier university they are likely to be going to.
And the costs vary widely based on how exclusive the college is.
A 529 plan is going to work best for most people and at just about any age of the child.
The sooner the better.
But, if the child is just about a teenager then this is the latest that you’ll want to open one.
It may seem daunting to save up enough in time, but the compounding interest really does add up fast.
Different states have different versions so make sure you understand the process and regulations for your specific state.
Start When they are Young
When your children are born is the ideal time to set up an Education Savings Account (ESA).
This is very much like an IRA but to use for education instead of retirement.
It allows you to put away up to $2,000 per year all tax free.
This is a nice way to lower your tax burden while also allowing you to take advantage of the compound interest to really grow a nice amount of money. If you’re unsure about how an ESA will impact your taxes, consider filing your taxes with the help of an expert to ease any uncertainty.
It will need to be used by the recipient before they reach the age of 30, however.
Life Insurance Policy
This may sound unorthodox and is not exactly saving for a degree for your child but is a great policy to have.
Since you are responsible for the well being of your children that includes financially while they are under your care, a life insurance policy is good to have in case anything happens to you.
Without one, if you were to die before they get to college then they would likely be under an extra financial hardship to be able to afford it.
This is a good way to make sure that nothing should block their path in the even of your passing.
Check out these related articles; How technology is Shaping Education, How to Maximize the Government Grants for Your Child’s RESP and What Parents can do to Help their Children get into College.