Every parent wants to provide their child with the best possible education opportunities and help them land a good job. However, securing your kids a place in a good university is expensive even with the help of student loans. Experts say you need to start saving as soon as possible, but in addition to college saving plans, you need to manage your everyday costs and retirement plans as well. Juggling all these things can be overwhelming, but with a good plan and some smart investing, you’ll be able to secure your children’s future, as well as your own.
Before you start saving
You should start saving for college early on, but you also need to bear in mind your retirement plans. After working so hard to give your kids a chance to get a college degree, the last thing you need is to weigh them down when they start their own families because your retirement funds have gone dry. The first thing you need to do is to pay back your own student loan. It’s a good idea to set aside at least 10 % of your salary for retirement funds. Since we live in uncertain times, it’s good to be prepared for any unexpected losses. You can set up a fund with approximately 5 months’ worth of expenses to stay covered if you lose your job, and you can establish a fund for all kinds of sudden expenses from home repairs to medical costs. In order to be able to help your child, you need to ensure stability for yourself first.
Regardless of whether you’re already saved a significant amount of money for your kid’s college or you’re still at the first phase, you need to come up with a plan and stick to it. Think about your total income and how much money you can set aside each month. Also, have an in-depth analysis of your spending to see if you can cut out something that isn’t necessary and direct that money to the college fund. Setting your goals and determining your priorities will keep you motivated and on the right track.
Plan in advance
You can start saving for your kid’s college as soon as they are born. Kids grow up quickly and before you know it, they will turn 18 and it will be time to send them off to a good university. You have several options when it comes to college saving plans, so you can choose the one that suits you best depending your financial situation. Choosing the right type of account is only the first step. It’s a good idea to make use of UMAT tutoring to enable your child to attend a quality university and increase their chances of getting a good job.
Prepaid college plans
With prepaid college accounts, you can buy tuition credits at a college in a state where you live with one major perk – you get the credits at the current rate of tuition and not at the one that will exist when your child is old enough to go to college. However, the downside of this plan is that you have to decide which school your child will attend to, which may not be something they’ll want when they grow up.
You can also make use of custodial accounts like UGMA and the Coverdell Education Savings Account as they function as trusts. You can put cash, bonds or stocks into this account and your child will be able to use it when the time comes.
It’s never too early, or too late for that matter, to start saving for your child’s college. You need to develop a good plan, take into account your entire income, daily expenses, and retirement plans. It’s a big investment, but it will pay off and you’ll enable your child to achieve their educational goals and create a good future.