It is no secret that the cost of college has gone up significantly over the past several years and will continue to skyrocket over the next 15-20 years. However, parents can lessen the burden on their children by preparing now to cover the cost of the child’s college education. What are a few smart moves that parents to make to save as much money as possible?
1) Enlist the Help of Other Relatives
Parents can make saving money for their child’s education by enlisting the help of other relatives. Asking the child’s grandparents, aunts and uncles to contribute money whenever possible can significantly increase the amount of money raised by the time the child is old enough to go to college. With compounding interest, even an extra $50 contribution for birthdays or at Christmas can make a big difference.
2) Put Money Into a Dedicated Savings Program
Many states have programs that allow parents to put money into a tax-free account that will grow until the child is 18. Grandparents and other relatives can contribute to these accounts and take a tax deduction for doing so. Along with state programs, companies that make and manufacture baby and children’s products often have rewards programs that allow parents to save for their child’s education.
3) Start Looking Into Tuition Assistance Programs Now
Even if your child has yet to be born, it is never too early to start looking into tuition assistance programs. Some state colleges will allow parents to make a deposit now to lock in today’s rates regardless of how long it will be until the child goes to college.
As long as the child goes to that college, it could represent an easy way to save thousands of dollars off the cost of college for your child. You may also be able to ask your employer for a bonus or an investment made in your child’s name that will be there for the child when he or she gets older.
When the child is older and starts working, it is imperative that the child finds an employer that offers tuition assistance and other financial aid to help you defray the cost of paying for college in 18 years.
4) Put Whatever You Can in the Bank
The best way to start saving for your child’s education is to put whatever you can into an interest bearing account as soon as possible. Even if you can only afford to contribute $50 a month at first, that money will grow and accumulate for the next several years into enough money to at least pay for a few classes or a couple of semesters. If you are struggling financially, it may be best to put the money into a trust because that money cannot be taken by creditors.
While paying for college can be a daunting challenge, it is possible with good planning. Enlisting the help of others, starting as early as possible and putting anything that you have into an interest bearing account can give your child a good head start when it comes to paying for school. It’s one of the best investments you will ever make.