Tips to Save for College in Honor of National College Savings Month
Last month was likely a busy time for families with kids recently returning to school. This month, we’re focusing on a similar subject by honoring National College Savings Month with tips to help you save for college. Recognized every September, this month is a time to teach families and their future students how to save for college wisely.
One topic that often causes financial stress on a family is figuring out how to save for college – or pay for college if there was no savings plan to begin with. For many households, the thought doesn’t necessarily become a concern until students begin looking into college.
But leaving this big financial investment until the last minute can mean paying a lot more out of pocket costs or even being forced into borrowing more in student loans. And if you don’t already know, going the student loan route can lead to decades of repayment plans and paying much more than the original loan amount in the end.
Do yourself, and your family, a favor by considering these tips to help ease this burden. And since college is one pathway to becoming an adult, we’re also sharing some tips that a teen can use to help contribute – since this is paying for their future after all.
Tips for Parents to Save for College
Instead of relying on student loans to send your kid to college, take a proactive approach with the below tips.
Start Saving Early
While it’s never too late to start saving for college, it’s never too early either. And the sooner you begin, the more you’ll have in the end. Saving early, even from your child’s birth, also means that you can save less at a time or space it out further if need be to accommodate your budget. This will keep you from feeling like you are throwing all of your money at once into a savings plan for college, reducing the monthly burden on your budget.
When deciding where to put a college savings fund, there are multiple options, including the following:
- 529 plan
- Mutual funds
- Roth IRA
- Interest-earning savings account
- Savings bonds
- Custodial account
Each option comes with pros and cons. It might be helpful to talk to a financial advisor to decide which method would be best for you. Or just do some good old fashioned research and you’ll be sure to narrow down your options.
Create an Automatic Savings Plan
If the sound of manually transferring money into a college savings plan on the regular sounds like a lot of work, think about creating an automatic savings plan instead. Usually you have two options with this. Your first option is to have your financial institution set up an automatic transfer from your checking account as often as you like to be deposited into your savings or other investment account. The second possible option is to ask your employer to transfer a portion of your paycheck into a savings account.
This will simply help make your life easier so you don’t have to remember to transfer the money yourself every month or however often you would like to do it.
Use a Rebate Program to Optimize Your Savings
Optimize your savings with a college savings rebate program. Organizations like Upromise and SAGE Scholars Tuition Rewards help you earn rewards that can be transferred to college savings plans or tuition.
Capitalize on Extra Earnings When They’re Available
Extra money is always exciting when it comes around. It can also be a beneficial way to put some extra padding into a college savings plan. If you wind up with a large tax return, a small scratch-off ticket win, or you use cash-back programs like Rakuten or Ibotta, put some or all of the money into your college savings.
Tips for Students to Save for College
Teens- you can do your part to save for college too! Go through the below tips with your parents and decide which ones would be a good fit for you.
Apply for Scholarships
Scholarships are a great way to cover a portion, or sometimes all, of the costs of college. And the best part is, they don’t come out of your pocket and you don’t have to pay them back. Scholarships are payments made to support your education, usually from academic or athletic achievement.
There are literally thousands of scholarships out there, some offering a few hundred dollars, and some offering full-rides! All it takes is finding the right ones you qualify for and a whole lot of time to apply for them. Try searching on websites like scholarships.com. Also, be sure to apply for our Community Currency Exchange Association of Illinois College Scholarship Program where we award selected individuals with $2,500 every year.
Earn Credits at a Community College
You can get a jumpstart on your college education while you’re still in high school by taking introductory classes at a community college. Community colleges are a great way to save money since the tuition is always cheaper than a public or private college. Pretty much every degree will require introductory classes like math, science, etc. so taking them at a community college either during or after high school will help drastically cut down on the costs of college tuition.
Get a Job as Soon as You Can
As soon as you are legally able, go out and get an after school or weekend job. Not only will this teach you valuable life skills for your future career, but you can help contribute to paying for your own college. Think about a part-time job during the school season and a full-time job during the summer. If your parents are still paying for your daily needs, then you can put all of your earnings towards saving for your future college expenses.
Remember, It’s Never Too Late To Save for College
Just remember that it’s never too late to start saving for college. Even if you or your teen only has a year or so before attending, that’s one year that you can set aside money or apply for scholarships to help reduce costs.
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