It’s no secret that saving for a child’s education is no simple task. There are plenty of bills that you have to pay before even thinking about stashing a little extra money away for a college fund. However, taking some action is better than taking no action at all!
Below we have outlined a few different ways to begin thinking about saving for your child’s future and education.
1. Start saving early
It’s never too early to start trying to save for your child’s college education! Nowadays, many couples are beginning that process even prior to the birth of their child. Getting your mind focused on a plan to start saving early in your child’s education can prove to be vital when it comes time to plan their future education plans down the road.
2. Create realistic savings goals
As with any life goals you set, creating realistic and attainable targets is crucial to you achieving those goals. Set a plan for yourself that you will begin saving X amount monthly (or annually) and work towards realizing that goal. Planning your goal out far in advance can go a long way to helping you realize that desired end result.
3. Utilize bonuses and tax refunds
We all enjoy getting those job bonuses and receiving our tax refunds, but instead of using that money to splurge on a vacation or new car, we recommend putting a portion of that away into a college savings account. This can be a great way to really put a boost into your savings! Imagine if you take a portion of that tax refund every year for 18 years? That will certainly create a solid base for your child’s college education fund!
4. Use 529 plans
529 plans are a tax-advantaged savings plan that help pay for education. They are highly regarded due to their potential for tax-free growth and financial aid benefits. According to Richard Polimeni, director of Education Savings Programs at Bank of America, parents were starting to invest in 529 plans for their children at around age 10 as of a few years back, but in 2020 there has been a growing trend to begin investing in 529 plans as early as the age of 5 for a child.1 Consider investing in one of these plans at an early age to get the savings rolling!
Hopefully you are able to utilize some of the above techniques to help kick-start a college savings fund for your child. Any amount you can save helps, so try and create a target and work towards realizing that goal! Years from now, you will be thankful you started early!