With rising college costs, you and your partner may be realizing the need to start saving earlier for your children’s education. With rising costs happening on many products, college tuition is included as well. Whether you have been thinking about saving early or realizing the need to diversify or rethink your savings, it’s never a bad idea to look over your finances and saving goals to make sure you are doing enough to help with your children’s future education.
The Need to Save
Now more than ever, parents are feeling the pressures of rising costs, including college tuition. Even if your children are still relatively young, it’s never a bad idea to start saving. Even just setting up a savings account and adding a small amount each month can make a difference in just a few years. Some banks are offering a fairly high savings APR, so you might as well take advantage. Many parents are starting to save earlier to hopefully make a bigger dent into the costs associated, even if their children may or may not apply to college. This money can always be used for community college, specialized training (like nursing school, trade schools, etc) or even towards your child’s next goals after high school, such as buying a car, moving expenses or even military duty.
529 Plans
A newer tool to help towards saving for college is the 529 Plan. These accounts are typically opened by a parent or grandparent, and are used to save for college expenses. They can also be used towards K-12 education expenses too! They are similar to a traditional savings account except that it is specifically used for education purposes, and if the withdrawls are used for college expenses specifically, they are often tax free as well, giving you a little break financially. You can send specific amounts to them every month or more to help get a jump start on your kid’s education, and once they are college bound, they can access the money to pay for everyday college expenses, such as tuition, books, and more. It’s a great way to help maintain that your children are using the money only for school necessities, and not just food!
Looking Ahead
If you are thinking about college funding as well, then that means you should start saving today! It’s never too early to start and you will definitely thank yourself down the road as those savings pile up. Don’t forget to switch up the savings if need be, between traditional savings accounts, to the 529 plan, to even a potential CD if you are starting early enough!
Katie Kyzivat