When it comes to getting a college education, financing is one of the most important aspects you will need to do.
Unfortunately, for too many people, this is one of the last considerations when it comes to our children's education.
If you are a parent, you owe it to your child and to yourself to plan ahead and plan carefully to cover the cost of your child's education.
Fortunately, there are some great ways to do this. The most common is to start by opening an education savings account for your child (under 18).
When you open an education savings account for your child, you can contribute up to $2,000 per year per child.
However, this is a combined total contribution and includes contributions from grandparents, friends and family in addition to your personal contributions.
Money from these funds can be withdrawn tax-free if used for educational purposes.
Education expenses in this case include books, tuition, fees, supplies, and room and board, assuming your child is at least a part-time student.
If you don't use all the funds for your child, there are options for what to do with the remaining funds in the account.
The first option would be to keep the funds in the account and allow the account beneficiary to withdraw them until the age of 30.
There is a penalty associated with this, and the recipient will have to pay income tax on these funds.
You can also choose to transfer these funds to another child under the age of 18 who will have future education expenses.
The money you put aside in these accounts to help pay for your child or children's education isn't tax-deductible, but it's a great way to start saving money and investing in your child's future.
If you start investing the maximum amount of $2,000 per year after birth, your child should have a nice nest egg to help cover the cost of education.
If your child is fortunate enough to qualify for scholarships and other sources of financial aid, you can turn those funds into a graduation gift or save them for the next college student in your family to come.
Either way, you've saved yourself a lot of the worry of providing for your family by setting up this fund for your children.
You can sign up for programs like U promise to subsidize your posts with donations from corporate sponsors as a way of saying thank you for buying their products or using their services on any credit cards you, your friends and family members have signed up for.
Go to your child's account. Every advantage you give yourself when it comes to investing in your children's education is worth having.
College tuition rates are rising at an alarming rate, while corporate expectations for college degrees are rising at the same near-lightning speed.
This means that a college degree is more important to our children than it was in previous generations.
Take the time to secure your children's future by setting up an education savings account.
Let friends and family know that any gifts they plan to give your children that involve money would be appreciated if they invested in your children's future instead of the present.
You can also ask your friends and family to register their credit cards with U promise, so you can make a small lump sum contribution to your child's college savings account.
These small steps add up to significant savings over 18 years. You may find that the investment you make is enough to cover the cost of your child's school fees in full.
You must be logged in to post a comment.