It’s National Higher Education Day! While many parents hope to be able to send their kids to college without accruing excessive debt, ever-rising prices can make that dream difficult. That’s why it’s important to start saving as soon as possible.
Check out these tips to get started on college savings today:
- Start a 529 Plan. A 529 College Savings plan is tax-free when used for higher education expenses. The account owner, maybe a parent or grandparent, has control over the funds and can change the beneficiary. The funds in the 529 plan will not affect the amount of financial aid the child can receive once in college.
- Try Another Savings Tool, Like a Roth IRA. While most people use a Roth IRA to save for retirement, it has flexibility that allows it to be used for other purposes. You can withdraw qualified education expenses from a Roth IRA at any time without penalty – tax-free!
- Put Away Money Consistently. It doesn’t matter how much, or how little, you can afford. Start putting money into a savings account regularly! Over time, any amount can add up and take care of a significant chunk of tuition.
- Use a High-Yield Savings Account for the College Fund. If you opt to put your money into a high-yield savings account, your funds can multiply with no effort from you. Shop around for an account with a great interest rate and start earning on the fund’s account balance!
- Look for Ways to Cut College Costs. Start thinking about ways your kids can get out of school with as little student loan debt as possible. Maybe that means planning to go to a smaller school with cheaper tuition or choosing to live in an apartment with roommates instead of a dorm or sorority or fraternity house.
