5 Ways to Save Up for School
School expenses have a way of adding up – whether you’re buying supplies for your fifth-grader or planning to foot the bill for your own education. Education costs more than it used to, and it’s never too soon to start saving up for your family’s education. By starting with these tips, you should be well on your way to saving up for your educational goals – and reducing your financial stress, as well.
1. Consider Opening a 529 Plan
Are you thinking of helping to pay for your child’s future college expenses? A 529 plan is a tax-advantaged account to cover future education expenses. It can help you save for your child’s college tuition or for your own future education and is a popular way for families to help fund their kid’s higher education.
Typically, these plans are sponsored by state governments. It’s a way for a portion of your money to be set aside in a fund, to be withdrawn at a later date. By deducting your contributions from your state income tax, the funds won’t be taxed and can potentially lower your taxes. Since state plans are different from one another you can put money in the state 529 plan that works best for you.
2. Invest in a Certificate of Deposit (CD)
A certificate of deposit (CD) is another option for people who want to save money that they will need later on. This is a simple way to set aside a portion of your funds that will gain some interest but won’t be available until the CD “matures.” The interest rates may be low, so do the math first – or ask for help in this area – to estimate the kind of gains you will see in two, five or ten years, whenever you will want to access the money. You will be expected to pay a fee if you access the fund before it matures, so you’ll need to take that into consideration, as well, to determine if a CD is worth it.
3. Evaluate Your Debts & Pay Off What You Can
How many sources of debt are you carrying? Maybe it’s time to take a closer look at your personal loans, past-due bills, and credit cards loans. Are you spending a lot of time worrying about your money problems? If so, make a list of any debts you’re carrying, from smallest to largest, not including interest rates. Next, make the minimum payments on all of them except the smallest.
Once you are able to, set aside money each month to pay off the smallest debt, then the second smallest if possible, and so on. Stick with this approach until all of your debts are paid off. And don’t get discouraged if you don’t immediately reach all of these goals. Dealing with money issues can be overwhelming, and you may want to consider getting professional help to better manage your stress or get your finances in order.
4. Consider Using a Prepaid Debit Card
A savings account is not an option for everyone. Yet credit cards can be financially risky for people who may not be able to pay them off promptly, luring them into a cycle of debt. That’s why using a prepaid debit card might be a good way to stay out of debt as you let your dollars accumulate.
A prepaid debit card is like a regular debit card, but is not linked to a bank account. Using one may prove a safer choice for you or your children than using a credit card because it protects the user from related high interest rates and hefty fees. They’re also a smart option for folks who want to spend money that they already have, keeping them from acquiring debt and keeping you on track to make smart spending habits.
5. Let Currency Exchange Help You Manage Your Finances
Sometimes becoming more organized with your finances is enough to get your spending under control and start setting aside dollars in your education fund. Community Currency Exchanges (CCEAs) have many ways to help you do that, through financial and auto services that keep their clientele on top of their finances.
Your nearby CCEA has loads of information and services to help you get your money where it needs to and take care of other financial tasks. We offer payment services such as Electronic Bill Pay and Money Transfers to help you pay off your expenses easier and faster. Stop by your nearest location or check us out online to find out what else we offer!
With over 350 locations, many open nights, weekends, and holidays (and several stores with 24/7 availability), you can rest easy knowing your financial needs can be taken care of when you need them most. We’re in the heart of every community. Don’t believe us? See for yourself.