Let me start by saying, you’re not the first parent to feel overwhelmed by the thought of saving for child’s college education. The cost is increasing every day and in this economy many parents feel that paying for their child’s future education is impossible. Well, I am here to tell you to be encouraged parents there is really a light at this end of this tunnel, no matter where you are in life you can always start saving something. Any amount is better than nothing, and there is no better time than NOW! Your American Dream can still happen.
Here are 7 ways to save for your child’s education:
- Invest in a 529 college plan, through a plan manager or a financial advisor. This is an investment account designed to help families save for college. You may enroll in any states 529 plan regardless of where you live.
- Start early with birthdays, you may ask friends and family to contribute to the babies 529 College plan, instead of or in addition to birthday gifts. This is a good way to save more and include family members in your child’s future.
- Use your Roth IRA to save, this is a special retirement account funded with post-tax earnings. Your dollars will grow TAX FREE for the life of the account. If you take a distribution from a traditional IRAor Roth IRA to pay for college before age 59½, you’re exempt from the 10 percent early withdrawal penalty. If you use the contributions instead of your earnings the distribution is usually not subject to taxes.
- College Savings Plan, this is another type of 529 plan which lets families purchase college credits today for future use at state colleges. Families will prepay an increased amount of tuition to offset projected tuition inflation. The state will invest the funds and the returns will pay for tuition.
- Your child can contribute too, if you have a working teen why not get them involved in saving for their future. This is the perfect opportunity to sit down with your teen and discuss the cost of college tuition. You may want to create an agreement with your teen, based on how much they make a specific percentage will be saved weekly, bi-weekly or monthly.
- Scholarships, are a smart way to receive free money for higher education. They are awarded in several different categories. Many are offered for academics, athletics, gender, minorities and civic organizations. Make sure your child applies for every scholarship they are eligible for regardless of amount.
- Financial Aid, is also a method used to pay for college. Make sure your child fills out the FAFSA as early as possible. You want to put your child in a good position to receive as much free money as they qualify for.
These are just a few ways to accomplish your college savings goals. Paying for your child’s future education can feel like an enormous task. However, if you create a plan that includes saving, scholarships and financial aid you will reach your desired goal of confidently sending your child off to college.
©2018 by Felicia V. Petit-Frere. All Rights Reserved. Felicia V Petit-Frere, MBA is a financial coach, founder and CEO of Windsong Financial coaching LLC (WindsongFC.com) where we help you become financially fit one step at a time. Join me in a facebook group set up just for you, The Smart Money Maker, we offer free challenges, webinars and do it yourself or group programs.