Simple College Savings Plan That You Haven’t Thought About
The very idea of putting enough money aside for your children to go to college is enough to strike fear into many parents’ hearts. With public college costs increasing every year, and even more for private colleges, finding enough money can seem impossible.
However, it's not beyond you - even putting aside $100 per month for 18 years can yield close to $50,000 at an average 8% interest rate! Here are some other ways to save:
Keep your priorities straight. This may seem surprising but don't save for the kids' college fund at the expense of your own retirement plan. Talented sportsmen and women, gifted musicians and even outstanding academic achievement can attract healthy scholarships. Being too old to work? Not so much. Look after your own finances first.
Look for good savings plans. The sliding nature of the stock market may fill you with terror, so instead of taking an educated gamble, go for tax-efficient savings options instead. Pre-paid tuition plans are ideal but read the small print carefully, especially in relation to state residency.
Financial aid. No one should feel that family financial circumstances put a college education beyond the reach of their children. Although grants and scholarships are best, as they are tax-free and never need repaying, federal education loans can extend to several thousand dollars per academic year.
Be aware, however, that students in receipt of this kind of grant are expected to hold down a part-time job to meet their remaining financial needs. These grants are also entirely dependent on many family factors with number of children including those at college and existing savings and retirement provision.
Spend money. Not on extravagant spending sprees but on clearing debts. Once credit cards, hire purchase agreements and other loans are cleared, the amount of disposable cash you actually have on a month to month basis becomes clear including how much can be safely put aside for the kids' college education.
Get educated yourself. Grant eligibility and loan regulations change regularly; stay on top of any updates.
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