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How to Collect Savings for your Kid’s Education

Post-secondary education can open doors for your kid in the future. It can forge their path to a fulfilling career and increase their chances of gaining a comfortable salary. As a parent, you want your kid to have every opportunity to follow their dreams. You can help make that possible by saving up for the costs of tuition, right now.

Start Saving Immediately:

It doesn’t matter if your child is still a toddler — it’s the right time to put money away for their education. The sooner, the better. The costs of tuition are high, and you’ll need time to generate enough savings to cover these costs.

A survey from the College Board found that the costs for attending an in-state public college average out to $25, 290 [1] [1]in a single academic year [1]. These costs include tuition, housing, service fees and supplies. For a private college, the average costs rise all the way up to $50, 900 per academic year.

What’s more concerning is that the price of tuition grows with every year, so parents with very young children will have to plan for the real possibility of higher costs. In comparison to the averages from 2017-2018, the costs of college in 2035 [2] are predicted to be $54,070 per year at public institutions and $121,078 per year for private institutions. That’s only 16 years away. If your childis still in diapers, these are the prices you might be dealing with when they’re applying for college.

Strive For A Third:

Financial experts advise that parents saving for college [3] aspire to put away enough of their earnings to pay for a third of their child’s overall education costs by the time they apply for college. Another third should be paid off with earnings, grants and scholarships while the child is in college. The final portion should be handled with student loans and paid off after they have finally graduated. If you start saving for this goal now, you’ll have made good progress by the time your kid is in high school. According to a recent survey, the average family saves up $19,784 [4] per child to pay for their college education —  this is lower than the average saving goal of approximately $38,953 each. Don’t be discouraged by the possibility of missing the mark — keep pushing towards the goal you’ve set. What
you end up saving will be of more help than if you hadn’t begun this process in the first place.

Open The Right Account:

Parents have good intentions when they open up a savings account in their child’s name.

The better move is to open up a 529 plan [5] because it is specifically designed for college savings and it offers tax and financial aid benefits that won’t come with your regular savings account. The plan has no limitations on age, so your child can use it even if they don’t move onto college right after high school. Every state has their version of the plan, so do your research to see what benefits yours offers.

Leave The Fund Alone:

The only time you are supposed to touch the contents of the fund is when your child is finally accepted into college and paying the tuition. Grabbing money from the fund will stifle its growth and encourage you to keep finding reasons to take from it again.

As a specialty savings account, it comes with the benefit of compounding interest that benefits from a larger balance. By syphoning money from this fund to pay for unexpected bills, you’ll lose out on this extra cash. You’ll also likely face penalties in the form of taxes and fees for withdrawing cash early for reasons other than education.

If you’re dealing with an emergency payment and you need some extra cash to take care of it, don’t dip into the college fund even if it’s only for a small amount. If you need a quick fix for this minor crisis like an overdue bill or unexpected car repair, consider using an installment loan. To see if you’re eligible this product, check out Moneykey.com/installment-loans-online/ [6] to learn more.

Online installment loans are short-term solutions that can help you deal with your problem right away. The repayment term is long so that you can tackle it at a convenient pace. You can learn more about the process at the official MoneyKey website.

The costs of post-secondary education are intimidating. At times saving for tuition may seem like an impossible mountain to climb. But with planning and determination, you can make it happen. You can save up enough to get them into the school of their choice and proudly watch them earn their degree.

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