How to save for college
The cost of college is expected to rise by 10 folds in years to come. Parents are wondering how to save for college and are willing to make sacrifices to provide a good education to their children. But these scarifices are not required if good financial planning is done to save for college. It is never too early to start saving for your child's college education. Sooner you start, better it will be. Below are some of the tips:
College Saving Options
- Start a savings account under your child's name as soon as you receive his / her social security number. Contribute Monthly.
- 529 savings plans are a good way to save for college and they offer great tax breaks.
- Start an investment account with a stock brokerage. You will need a minimum of $500 to open an account with a discount broker. Buy long term investments such as ETFs, Stocks, and Mutual Funds. Invest Regularly. If you start a savings account and invest in stocks, an average of $100 dollars a month, in 18 years you may have more than $50,000 assuming a rate of return around 10% a year.
- If you do not have a high income to save or invest, then you should start learning about Financial Aid and Scholarships. More you learn while your child is growing better you can plan. In any case, do not let money become a barrier to your child's college education because financial aid plans can pay for free if you have a low income and you qualify.