Welcome to parenthood! Where wanting the best for your child can also meaning paying the significant cost of college.
The cost of college has dramatically increased over the years, resulting in the nation’s youth graduating with overwhelming debt. Making matters worse is the job market for people without a degree, where finding a job that makes a living wage with good benefits tough. College, with a few exceptions, has become a necessity to live a decent life.
However, if planned out, getting your child through college doesn’t have to drain your life’s savings. So let’s create a plan to get your kid through college debt free.
Don’t forget to enroll in our free course, budgeting and saving money. The course is designed to help your family save more money, which will help send your child to college.
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How to save money for your child’s college education
One of the biggest mistakes that parents make when saving for their kid’s college education is not starting soon enough. Ideally, the best time to start saving for college is before your child is born.
Remember, the awesome power of compound interest works better over 18 years of saving rather than five years. Even if you were to try and save, let’s say $50,000, in just a regular bank account, that’s about $278 a month over 18 years or about $833 a month over five years.
Start as soon as you can! Create a budget, talk to a financial planner to make sure you are saving enough, and don’t stress!
529 College Plans
A 529 college plan is a fancy term for a federal tax-exempt college fund for your kid. You can read all about 529 plans on the U.S. Securities and Exchange Commissions’ website.
This type of savings plan covers qualified education expenses such as tuition, room and board, mandatory fees, and books. There are no age limits, meaning you can use the savings account as an adult.
One of the notable features of this savings plan is that college costs are not locked in. This means that if the cost of college increases, you might need to save more money to cover the cost of college. This is why some people elect to go with the pre-paid tuition plans.
Pre-Paid Tuition Plans
As stated above, the benefit to buying pre-paid tuition plans is that you are buying college tuition at today’s prices. This means if you purchase a semester worth of tuition credits today and the cost of tuition increases over the next few years, then you won’t have to pay for the increase in cost.
These plans typically only cover tuition and mandatory fees, but in some cases they allow funds to be used for room and board or other expenses.
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Evaluate your budget
Now is the perfect time to go over your families budget and see how you can save more money. I’ve created a free course on budgeting and saving money to help families.
The course is full of information and tips to help your family save more money. You can use this money to help pay for your child’s college education.
You may need to consider cutting back your spending to meet the high cost of college. It may not be easy, especially if you already have a tight budget.
Consider eliminating any luxuries you might be taking, such as buying coffee every day and making coffee at home. Sometimes saving even just a little bit more can make a huge difference over the years.
If you don’t already have a budget, sit down and start writing out your monthly expenses. Don’t sacrifice your retirement to send your child to college and don’t feel bad if you can’t set aside enough each month. The next couple sections are aimed at meeting your savings goals if there isn’t enough money left in the budget.
Have Your Kid Chip In
There is no reason why you need to be the only one responsible for sending your child to college. Thirty years ago, it might have been more obtainable for parents to pay for school, but today it’s even more challenging with the increased cost.
Once your child is old enough to start working, have them work towards getting a part-time job or internship. Internships are great for building experience, making connections for future employment, and saving money for college. Some companies will even pay for your child’s education as long as they get a commitment that they will work for them after graduation.Sharing is Caring!Click To Tweet
Help Find and Apply for Scholarships
Help your child search for and apply for scholarships often. Do Google searches, ask the college, ask friends. Look for scholarships like you’re trying to find the last chip in the bag.
Get passionate about scholarships because there are a lot of people out there giving away money.
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Consider Getting A Side Job
Yeah, the idea of getting a job on top of your job doesn’t sound too appealing. It’s a huge commitment and burden for you to undertake.
If you are desperate to send your kid to college, getting a side job might be the way to go to meet your savings goal. Remember, you don’t have to keep doing your side job forever, just long enough to earn the extra money you need for college.
Don’t forget to enroll in the free budgeting and save money course! The course is full of information to help your family save more money.
What are your tips for saving money for college? Let us know in the comments below!