PrimeWay Offers Student Checking & Savings
Some lessons aren't taught in school, like those learned from our Student Checking and Savings accounts. With small starting deposits and no monthly fees, we give your kids the resources to understand how to manage money - all to ensure a successful tomorrow.
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:
- University of Tennessee - In-State: $11,332 Out-of-State: $29,522
- University of Iowa - In-State: $10,353 Out-of-State: $32,316
- University of Washington - In-State: $12,242 Out-of-State: $40,740
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.
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!