Here at Atlantic Key Energy, we’re all about saving money and making responsible, conscientious decisions. That’s why today we’re talking about five easy ways to save for college.
College tuition is easily one of the most significant expenses you’ll ever have to pay up. What’s more, it’s projected that the average tuition will only rise over the next decades. Therefore, that huge expense will only get bigger.
If you have a newborn that will need to go through college in 18 years, that means you have just shy of two decades to accumulate around $40,000. The price goes up if your kid decides to go to a high-end or Ivy League school.
All in all, college costs a pretty penny. It costs almost as much as a new house! So, how do you save so much money? Here are five easy ways to save for college.
Make a Solid Plan (And Lock it in)
Since average tuition has tripled since the end of last century, saving up for your child’s college education is no longer as easy as it once was. Therefore, if you’re wondering when you should start saving, the answer is — now.
However, instead of just setting money aside every month (or every other month), you need a solid, realistic plan. The longer you save, the more money you’ll be able to accumulate. What’s more, you’ll also acquire interest.
So, make a plan on how much money you’ll set aside each month and for how long. Pick a tax-free account and start your journey to college tuition.
Make Sure You’ll Be Able to Keep Up With it
Of course, it’s easy to say, “I’ll set this specific amount aside every month.” The hard part is actually doing it every month.
Well, actually, the hardest part is doing it during months (or years) that are financially hard or come with huge expenses. When it comes to five easy ways to save for college, actually saving money is, of course, the biggest challenge.
So, you need to be able to lock your plan in. You need to make sure you’re actually contributing to your child’s college fund. The best way to do it is to cut some costs of living and set the difference aside each month passively.
For example, switching to solar power will significantly decrease your power bill. Not only is solar power more cost-effective, but it’s also cleaner and more environmentally friendly.
So, by switching to solar, you’re essentially saving money (which can go directly into your child’s college fund every month), and you’re preserving the planet for your child!
After you’ve made a plan and a way to save up money each month, you need to pick a savings plan. 529 plans are an excellent choice for college funds.
A savings plan can make or break your investment, which is why you should choose carefully. 529 plans offer you a chance to gain a larger return on your investment. They’ll accumulate more money faster than traditional plans with regular, average interest rates could.
They are also easy to deposit money into. That means that your relatives, friends, and family can easily contribute to your child’s college fund on special occasions.
Plan for More Than Tuition
When planning your kid’s college fund, you must remember that tuition is only the tip of the iceberg. Sure, it’s definitely the most significant expense, but if you want to cover everything your child will need, you’ll also need to plan for other expenses such as books, dorms, additional fees for enrollment, etc.
Look for Additional Resources
If you’ve done the math over and over again and came to the conclusion that you simply can’t save enough to put your child through college, don’t despair. Save up as much as you can, because every penny counts.
As for the rest, look into additional resources that will help you. FAFSA will become your best friend in this case, so make sure you study the regulations thoroughly as soon as possible. Loans, scholarships, and grants will also come in handy, so make sure you investigate and see which ones are the best fit for you.
A Few Parting Words
We hope you find our list of five easy ways to save for college helpful or at least informative. Building a college fund for your child is no joke, so we applaud you for doing your best to stay on top of such a difficult task!