Do you know that investing in a 529 education savings plan is one of the best ways to afford your child’s college education costs? Currently the most used financial option by parents, these college savings plans are more than just for studies. What about additional college education costs that your child may need to cover when he’s in college and of course let’s not forget the college tuition fees themselves. For those who do not invest in 529 savings plans there are alternatives so whatever decision you make in investing in child’s education, there are no right or wrong answers.
Why do parents go for college savings plans more than anything else? Because it’s an investment that will usually grow faster than the inflation rate and with a minimum monthly payment your child can have access to a large sum of money when they go to college thanks to you. How early you should start? The earlier the better because the earlier you start the less you have to invest a month in order to send your child to college. School is not only about learning but it’s also about having fun so it may not come as a surprise but the funds will not only go to school.
Like everybody else students do need to get entertained sometimes so the money invested in 529 plans may pay for education but it will also be used for other purchases. More important than entertainment, if your child lives on campus, there is the rent to consider, the food, the utility bills and other expenses related to the cost of living. So it’s important that whatever money is invested in a 529 savings plan takes care of your child’s additional expenses. The main use of the college savings plan is to pay college tuition.
The most expensive part of going to college is paying for college tuition fees of course. Varying from a few thousand dollars to almost $20,000, college costs are usually a big factor as to why some students will study two years instead of four. Another factor is whether they will go to private schools or public schools. It’s important to make the decisions beforehand so you can see if your child has funds and if they don’t, how much will they need in order to graduate from college. Some of you may not have enough time to invest in a college savings plan which is why there are quick financial alternatives for those in need.
Maybe faster than savings plan, there is one catch which is the money does not belong to you. A college loan is money that you borrowed which means you will have at least one creditor to who you owe a debt. Although you can get a huge amount of money in a short period of time, you have to pay it back with interest and the longer it takes you to pay it back to more it will cost you in interest. But if you are good with money management then loaning money will not be a problem for you.
Planning for a child’s college education is extremely important since college costs have been known to be rising much faster than inflation rate of the country. If you want to be able to compete with that inflation you must start early and investing in a 529 education saving plan when a child is still young will give you a big head start over the rising cost of college. Don’t leave your child’s college education to faith, your child believes in you so let’s keep it that way.