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Saving Money For College
You want to attend college to further your education so that you can enjoy a good career, but you don't know how you will ever afford it. Even though it is still years away, attending college costs a substantial amount of money, and the cost continues to rise. If you are a parent, you can send your child (or children) to school without going financially bankrupt. If you are a future college student, these tips will help you as well.
How to save money for college
Have clear goals in mind. Years before a child attends college, it is a good idea to have a clear plan set out. Since college tuition continues to rise, how much will it likely be by the time your child attends college? Once you have a general idea of how much the costs will be, you can determine how much you will need to save each year in order to pay for college and still live comfortably.
Don't procrastinate - start saving now. The earlier you start to save for college, the more you will be able to enjoy the compounding interest that accrues over the years. Even if your child is only a baby, it's a good time to start a college savings plan.
Make small sacrifices. Throughout the years, you can save money by simply sacrificing small things such as that $4 cup of coffee at Starbucks you enjoy two or three times each week. Image if you were to save $8 to $10 every week for 10 or 20 years - the money would really add up!
Pay off a debt? Apply the payment to a college fund. When you pay off a debt (such as the car, RV, credit card, etc.) begin placing the amount of money you have been paying on that debt to a college fund. You won't miss the money, and your college fund will grow in leaps and bounds.
Set up automatic transfers from checking to savings. Most banks will automatically transfer money out of your checking account into a savings account if you request it. In doing this, you will likely never miss the money - and you won't be able to write a check or use your debit card to spend the money, because it is no longer in your checking account.
If you are a parent, invest. Investing in mutual funds and other solid investments is a good idea, particularly when your child is junior high age. Stick to simple investments, those that have low expenses and offer solid track records. Learn all you can about investing before you jump into this option.
Consider financial aid. There are numerous school loans and college grants available. Whether or not you will qualify depends upon factors such as income level, how many children are in your family, how many are enrolled in college, and your assets (other than retirement). In most cases, if you are awarded a scholarship or grant, the money typically does not have to be repaid and is tax-free.
Saving money for college is not impossible, and there are many ways to go about it. For most people, a combination of methods works best.
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