Sep 8, 2015

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Tips and Trick for Saving Money for College

Girl saving for collage

Getting a proper, good education for their kids is a major goal in the life of almost any parent. Knowing that the higher the education, the bigger are the chances of getting a dream-job in the field in which they are interested the most. That is the reason why going to college is imperative for many ambitious adolescents, but due to the economic situation and the total system of society in which we live in graduating from public or private university is not so easy. Achieving this goal demands various types of sacrifice and commitment, both from the children and from the parents as well.


Prices of tuition and total costs of going to college are constantly rising, since they depend on complicated economical factors, and predominantly inflation as the most important element. Estimated amounts that are necessary to cover a year’s expenses in a life of a student range from approximately $19.000 for students of private in-state colleges up to around $40.000 for those who choose to attend lectures in private universities. Multiplying this by four (or usually more) years that average student will need to finish his or her education, gives a hefty sum, something that most families cannot afford without being smart and having an acceptable saving plan.

            Experts on financial matters often give concrete advices on this subject, and here are the most popular ones:

  1. Save early and save often: Saving as soon as possible is the most common advice anybody will get. It does make sense, actually…since the more time you have – the more money you will save. Most parents are being encouraged to start before the baby is even born! Other important element of this is that you need to save in regular periods, if possible to invest at least some amount of your monthly income into that child’s fund. Random intervals will not allow you to develop the habit of saving, and this is something you definitely need in order to save enough money.
  2. Make saving automatic: This involves the regular transfers of funds from your bank account to saving account. For example, after every salary comes in, the bank will transfer some portion of that money to the saving account, which is beneficial for two reasons – you do not have to go personally to the bank and the money is less likely to be spent if it is not on your personal everyday account.
  3. Increase the amount: With every year and every potential promotion or change of salary try to increase the amount you put aside. This may not be easy, but even the smallest of changes can prove to be very useful in the long period.
  4. Save the extra money: If for some reason you get a windfall, i.e. the money coming from unexpected sources such as inheritance, lottery, bonus at work, etc. try to invest that money immediately into you saving fund.

Saving for college is a long race, so it should be treated with care but also with patience. Small stones can still build a large palace, so investing even tiniest portions can perhaps be enough in the long run. The most important advice is to be intelligent and choose a smart saving plan.


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Sep 8, 2015

Posted by | Comments Off on How To Save For College

How To Save For College

            In the old days parents celebrated the arrival of a new child with throwing a party, or with something similar. Nowadays they open a savings account. Times have maybe changed in that aspect, but the point is that almost all parents still want to provide the best possible education for their kids. Going to college is considered to be the basic pre-requisite for a successful career and having a college degree “opens many doors”, at least in theory.

            saving-money-for-collegeEven though it may be something most parents want, there are still those who can only dream about visiting their child on a college campus. College tuitions are huge, and it seems that they keep growing with each passing year. Other than buying a home, sending a child to college is probably the biggest expense many families ever have to make. There are of course scholarships and other forms of help, but parents are the ones who have to pull the most.

In 2014-2015 according to the College Board, average yearly costs in a public college for in-state students go up to $19.000 and for a private nonprofit college they average $42.000. And, since simple mathematical operation is required to calculate the average costs for total amount for four years (although majority of people do not graduate in that period) – it turns out that your bank account should be as high as $76.000 for a four-year public college and $168.000 for a private institution.

Since people who can cash out amounts like these at any given moment are fairly rare, there are various ways in which your money can be safely put aside until the big moment comes. Most experts advise that you start saving as early as possible, i.e. now, but here some other useful tips and tricks:

  • Start to save early: Early start gives you one, quite simple advantage – the more time you have, the more you can save. Creating a solid college saving plan as soon as you can is the best solution for fulfilling your child’s desires and aspirations.
  • Increase the amount you save: Most experts also will advise you to gradually put aside more and more money, if possible. It doesn’t have to be an increase in giant figures, but a slow, constant rise can do wonders in the long run.
  • Start the 529 plan: 12 million Americans use the most popular way of saving for college. This way of funding got his name from the tax section it comes from, and its official legal name is “qualified tuition program”. This basically means that you save money tax-deferred, until your child goes to college. Funds stored in this way have one important characteristic – the withdrawal can only be made in purposes of paying for qualified higher education expenses, like tuition, books, mandatory fees, etc.
  • Make saving automatic: Asking your bank to remove funds from your account to your saving account automatically and regularly is a must. And it is every-day business for bank so you should exploit this option definitely. It saves you from going to the bank every month to wait in line and fill out checks, and also guarantees that money will not be spent on some other urgent matter of the moment.

There are of course number of different ways in which you can stash away your hard-earned money, but following these few steps will enable you to have as much fund as possible when they are needed the most.

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