Skip to main content

Parents Saving Tips: The Top 10 Ways to Save For Your Child's College Education

How To Start Saving For Kids College

Do you want to save for your child's college education but are unsure where and how to start? Then it's time you learn the parents saving tips that we will discuss in this blog.

Pursuing a degree from an institution of higher learning remains very costly. However, studies continue to show that degree holders earn a significant amount more than those who do not possess a college degree. In fact, the average college degree holder will earn $1.2 million dollars more than a non-degree holder over their lifetime. Therefore, millions will continue to go to college each year. If you have a child that you would like to provide with the opportunity to seek a college degree, then you need to know how you can begin to save money to pay for that expense.

Parents Saving Tips Must Haves: Create a 529 Savings Plan for Your Child

One option you can look at to begin saving money for your child is to open up a 529 plan. U.S. News and World Report offers the following information about what a 529 plan is all about:

The savings plans, usually sponsored by state governments, encourage saving for future education costs. They often are tax-friendly in the sense that many states will let you deduct your contributions from your state income tax, and when you withdraw the money for college, the money won't be taxed. You should research the specifications of your state's 529 savings plans to understand the numerous benefits that you can get from them as well as the requirements to get started with them.

Apply for Aid

No matter your financial situation, it is important to make sure you apply for aid. This is done by filling out the FAFSA form every year. Those who do so will get a response from the government regarding their eligibility to receive certain types of financial aid. This may come in the form of grants or loan offers to help pay for the cost of school. Ideally, you will keep student loan borrowing to a minimum, but those loans are there to bridge the gap if you are unable to come up with the full cost of tuition.

Tips To Save For College

Start Trimming Your Budget Now

One issue that some parents run into when they look at paying for their child's college education is that they start too late. The process becomes very real to them during their child's junior and senior year of high school, but they should have begun saving for college long before that. You don't have to wait until college is directly upon you. You can begin to trim your budget and increase your savings beginning far sooner than that. If you do, you will end up creating better habits for yourself, and you will also likely have more money saved to provide for your child as they approach their college years.

Open a Roth IRA for College Funds for Your Kids

It is true that the primary purpose of a Roth IRA is to save for retirement. However, funds can also be used for college expenses as well. Those are tax-shielded dollars that can be contributed toward a child's college expenses. Another upside of using a Roth IRA is that you can keep those funds where they are in the event that your child decides not to attend college after all.

Invest in Mutual Funds

Those who have some time to go before their child enters college will want to consider investing in mutual funds. These funds are great vehicles for creating a diversified set of investments for the individual. You can benefit from the growth in the market over time and use that to grow your capital so you have enough money to cover college tuition expenses.

Place Money into a Custodial Account

While working on saving for college for your child, you can place the funds that you save in a custodial account. This is an account set up for the benefit of someone under the age of 18. Those accounts are generally set up by a parent or grandparent for the benefit of their child or grandchild. Minors cannot legally set up their investment accounts until they are 18, so the adults set one up on their behalf. It is another way to invest funds and watch them grow over time to help take care of college expenses.

Parents Saving Tips: Take on An Extra Job

Sometimes, the best way to save is to add to your income overall. There is simply no getting around the fact that you might need to take on another job to increase your income. These days, it is possible to take on a side gig in your spare time to generate that extra money. Take the funds that you receive from those extra hours of work and put them away in a savings account if possible.

Select an In-State School

The team at Ramsey Solutions recommends as one of the parents saving tips is that you choose an in-state school to send your child to. While they might have dreams of going somewhere farther away, it is more cost-effective to attend an in-state school. Rates charged to in-state students are lower than rates charged to out-of-state students. These differences are not small. For example, the following are tuition figures for in-state vs. out-of-state students at various universities:

As you can see, no matter what, there is a tremendous difference between what you can expect to pay. The difference as an in-state student compared to what you will pay as a non-resident.

Consider Work-Study Programs

Many colleges and universities offer work-study programs. These are offerings that allow students to work a job on campus to help pay for their tuition expenses. The student is given a break on some of their tuition expenses when they work in these programs. Also, that can help reduce the expense of a college education.

Purchase Savings Bonds

There are savings bonds that parents of those attending college can purchase. These savings bonds allow them to earn some interest on their investment to put toward tuition expenses in the future. If you use the money toward college expenses, you can deduct the proceeds of these savings bonds from your tax burden for that year.

Just because you are on a budget does not mean that you have an excuse not to save for college. The reality is that higher education is only going to continue to get more expensive with time. Start working toward putting your loved ones in the best possible position by using savings strategies to help them pay for a college or university education. 

Parents Saving Tips: The Top 10 Ways to Save For Your Child's College Education

Do you want to save for your child's college education but need help figuring out how to start? It's time you learn the parents saving tips that we will discuss in this blog.

Parents Saving Tips: Final Thoughts

It is essential to consider a college savings plan early, regardless of your child's age. To ensure the best plan for your children's future, it is crucial to comprehend all available investment options.

SmartVestor provides the opportunity to connect with qualified investment professionals at no cost. These professionals are trusted to handle your college investments and prioritize your child's well-being. If you are interested in attending college without loans, Debt-Free Degree is a valuable resource. This book is a must-read for both college-bound students and their parents, offering comprehensive preparation for the next chapter. Obtain a copy today!

Author Bio

Keith Huckabay

Take 3 parts Internet Junkie, 4 parts Broadway Fanatic, 1 part News Addict, 2 parts Comedy Enthusiast, and mix it with some ice in a blender and you get Keith. He is highly energetic and brings just a little bit of quirky to all he does. When he’s not marketing his pants off for PrimeWay, Keith likes to hold court with his friends over a nice dinner or traveling new places.

Subscribe To Blog

Welcome Back!