Getting a Late Start? Here Are Some Money Saving Tips!
As college costs continue to rise, parents struggle with productive ways to save for their children’s education. The Huffington Post suggests the following methods for productively saving for college:
1.) Adopt the One-Third Saving Strategy- As parents plan to pay for annual tuition, which can range from $9,410-$59,430, one-third of the tuition should come from college savings, one-third from current income and one-third from student loans.
2.) 529 Plan- Start a 529 plan and begin contributing regularly.
3.) Family Gifts- Ask grandparents, aunts, uncles and other family members to contribute to a 529 plan instead of giving countless gifts during birthdays and holidays.
4.) Maximize Your Savings- You can contribute up to $15,000 per child, per year. During the first year of creating a 529, however, “frontload” your savings by depositing up to five years’ worth of contributions. Furthermore, if your child will be attending college in the next few years, explore pre-paid tuition plans to avoid increasing tuition rates.
5.) Conservatively Invest Savings- If your child is attending college in the next few years, invest conservatively in order to protect the principle. If you children are young, invest slightly more aggressively to maximize growth.
6.) Plan Effectively and Address Why Saving Has Been Difficult- It is expensive to raise a child and overwhelming to save for college. Be proactive, however, about creating a plan that makes sense for your income and your family.