As children are about to complete the high school education, they could start thinking about college. Parents should also have special consideration in ensuring that they provide good education after high school. Unfortunately, college education cost tends to go up along with the rate of inflation.
As parents, we should start much earlier, possibly when children are still at elementary schools. It is better to start early, so they can plan well ahead. Unfortunately, many parents don’t have the clue about ways to save money and ensure good education for their children.
These five tips should give them a head start in preparing children for college education:
1. Look for information on saving plans:
At the moment, parents could choose different types of saving plans for their children. Each plan offers different type of advantages. We should study them accordingly and find the best one that matches our requirements.
Many of these plans provide great tax benefits, which we can ask our financial advisors to assist us if we don’t know how they work. In general, saving plans could provide ways to reduce the overall college expenses significantly. It is possible for us to pay only half or even lower than the original costs.
2. Consider prepaid college tuition plans:
There are plans that provide us with the opportunity to prepay college tuitions. This allows us to avoid increases in costs later. Each year, college tuition tends to increase as they need to cope with the rate of inflation.
Fortunately, it is not necessary to choose any college at this stage. Some plans are managed by our local states and parents could assign these prepaid plans to colleges that they choose. However, if parents decide to enrol their children to colleges located at different states, the prepaid tuitions plans may not work for them.
3. Start immediately:
We should start making real actions when our children are at elementary school or even better when they are still a baby. By starting early, it would be much easier to handle the expensive college costs. We can put money into our children’s college fund since they are toddler.
This allows us to allocate smaller amount compared to when start after our children are at high school. By having an early head start, we could better ensure good education for our children. There will be a sizable fund that can allow an enrollment in high-profile colleges.
4. Allocate a portion of regular savings into college fund:
To speed up our financial target, parents should consider putting aside some amount of their regular savings and paycheck to children’s college fund. When we get money incentives or bonus, it would be better to allocate them college funds, instead of spending it on vacation or home theatre. Bear in mind that there’s an annual contribution limit that we need to obey to avoid penalties.
5. Use parents’ name for the college fund:
Parents should have the total control over the college fund. While some children are responsible enough, others could occasionally use part of the fund for fun.