Today, even community colleges are expensive. If your child chooses to go to a 4 year college you plan to spend anywhere from $20k-$60k a year. If you start saving early, you can have 18 years to save as much as you can to provide for your child’s future. You have a couple different options for saving.
Banks offer college savings plan such as a 529. Don’t let the numbers scare you. This is just a savings plan much like an IRA that comes with tax benefits when spending the money on college. Websites like BankRate are wonderful recourses for checking the best annual percentage rates. A 529 is probably the best way to save for college long term. There are also other methods to putting away money for college.
Let family know that your child prefers savings bonds for birthdays and holidays. Savings bonds are a great way to give the gift of money with the assurance your child cannot spend them like cash. When the time comes to cash in the savings bonds, it is reported to the IRS. If spent on education, bonds can also come with tax benefits. Bonds are a wonderful way to put aside money but parents and family shouldn’t bear all the burden of paying for college.
Instill financial goals and responsibility in your child. Let your son or daughter know that you will help pay for college but they also have to do their part. Talk with him or her about scholarships, student loans, work-study programs and assist them with establishing their own college savings account. Educating your child about saving and spending will be one of the greatest gifts you can give.
Don’t wait until the last minute to start saving and don’t take all the responsibility upon yourself. Involve your family and the future college student themselves in the savings process. Every child deserves the opportunity to go to college.