Setting up a college fund four your kid sounds easy, right? What’s the right age to start? How much should you save monthly? What’s the best account to put the funds in?
The process may seem a little overwhelming, but relax! Check out these helpful tips to get your kids college savings plan on the right path!
Start Early
When it comes to saving for college, the best time to start is now. Even if you’re considering a family or pregnant, it’s never too early to start. Long-term financial dreams take planning commitment and time to come to fruition – the earlier you start the better off you’ll be in the long run. Need help budgeting your savings plan? Access our College Savings Calculator below!
College Savings Calculator
Set Exepctations
According to the U.S. Department of Education—Office of Postsecondary Education,the average tuition & fees of public colleges in academic year 2021-2022 was:
- $6,974 for in-state residents public university
- $12,644 for out-of-state resident’s public university
- $17,881 average private school's costs
The cost of higher education is high and continues to grow with inflation. If you start with a smart savings plan you can begin building this cash early.
Open a 529 Plan
From Savings Bonds to High-Yield Savings accounts, there are many options available to build your child’s college savings. One of the most popular ways for saving for college funds is opening a 529 Plan. This account is usually sponsored by stated governments and comes with advantages including compound earnings and tax benefits. The earlier you start, the more you save!
Open an Eligible Savings Bond
Another way you can start savings for your childs’ future is by purchasing savings bonds online from TreasuryDirect.gov. Some of the advantages of putting money into savings bonds is that they're guaranteed by the government and extremely low to no risk. On the downside, the interest you'll earn can be pretty low.
Speak With a Financial Advisor
Trying to decide which type of college savings plan will fit best and how much you should save monthly according to your budget and future plans can be difficult. A Financial Advisor can provide great information and guide you in the right direction. You can book an appointment with our Wealth Management Advisor to help you get started.
The bottom line is you should choose the savings option that’s right for you – soon. The faster you begin saving, the less financial stress your family and child will have when heading off to college.