Tips to Saving for College
If you have kids, you will want them to go to college, but you also know that the cost of a college education isn’t cheap, and they are only rising. If you want college to be a part of your kid’s future, there are some things you can do today to make college a reality.
Create a Separate Account
Create an account where you will not touch the funds. For example, don’t start saving money for your kid’s education by putting money into the same savings account that you may have to dip into when you need money for other things. You will never be able to save enough money that way. Instead, put the money into an account strictly for education and nothing else, and only add to this account when you can financially do so.
Consider Investing the Money
You may want to consider investing the money in any number of ways to make your money grow. It’s a good idea to invest your money in a low risk account, such as a savings account or CD. In this way your money can safely grow without risking any loss.
Many states now offer education savings accounts where you can essentially “lock in” current tuition rates to pay for your child’s education years later. To take advantage of this savings account, you will need to choose how much tuition coverage you will want to use. Once this amount is determined, you can have the option to pay this rate all at once or through installments.
Take Advantage of Your Current Investments
You may want to consider using your current investment or retirement accounts to borrow money against yourself. This is a popular option with certain types of accounts, like the 401k or 403b. You will have to pay the money back with interest, but the interest rates are low, and you are still putting this money towards your retirement.
As you can see, there are plenty of options available for getting or saving the money you need to pay for your child’s college tuition. The key thing to remember is that, like any other investment, it takes time and organization to plan for college.