Saving for a child’s college education is one of the biggest challenges that parents face today. With the cost of education rising steeply, it is a tricky task for parents to fund the entire amount to support the higher studies of their child. As a result they often have to accept loans at a huge rate of interest. To meet the cost of higher studies, you need to save for your child’s education intelligently.
Make an Estimate of the College Education Cost
When you are planning to save money for your child’s college, you should first make an estimate of the expenses that you may have to bear. When you are calculating the college education fees, you should not just consider the tuition fees but also the price of books and accessories required for educational purposes. It is also recommended to include the cost of housing and accommodation in the estimate you make, as it might be required for students planning to study in different states.
Search for the Different Investment Plans
You can find various investment plans meant for financing your child’s college education. Spend some time to browse through the choices available and make the decision appropriately. Nowadays, you can find different types of federal investment plans as well as private investment plans for meeting your financial requirements. Check the details of each of them thoroughly before making your decision. It is always recommended to go for the federal investment plans, which offer tax free saving. Yet, that does not mean, any tax free plan will work. 529 Plans and Coverdell Education Savings Account are both great choices in this regard.
Try to Get Multiple Plans
If you think a single plan will not be enough to support the educational expenses, you can apply for multiple education investment plans. Before opting for multiple investment plans, you should check the clauses of each and ensure they are all applicable in your state. Also verify whether you are eligible to open multiple accounts or not, since this may not be an option for some of the vehicles available. Saving money in different plans make it easier for you to raise the required amounted needed for your child’s education. However, it might not be easy for you to manage your income and save the amount that you need every month to meet the required sum of money for funding the investment plans. So, be sure to know your limits and select a plan that is affordable for your budget.
Encourage your Child To Save
Because of the higher costs of education and its steady increase it might not be possible for parents to fund the entire amount needed by themselves. Therefore, it is always good to encourage your child to save some money by doing after school jobs. It is a good way to help your child to become responsible and help them feel as if they are doing their part as well. If money management is done properly, students can save a significant amount needed for funding their college fees or at the least can help to…