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Categorized | Paying For College

Creative Ways To Start Saving For Your Child’s College Fund

The following is a guest post by George Gallagher. He is a personal finance blogger and frugality coach that helps post-grad students manage their private student loans with CUStudentLoans.org

As a parent, saving for your child’s college education might seem to be a daunting task. College tuition is extremely expensive, no doubt. However, the payoff of seeing your child attend and graduate from college can hardly be matched.

So at what age should you start saving for your child’s college education? There really is no concrete answer to this question, however it makes sense to start saving for their college education as soon as possible. For instance, if you only invested $100 a month for 18 years, that will yield $48,000 assuming an 8% average annual return.

Most parents think that saving for college has to be some kind of enormous task, however just $100 a month can make such a huge difference. You can also look into different kinds of college savings plans such as the 529 which will allow you to really start a substantial savings plan in plenty of time for your child to go to college.

Another component of making sure that your child gets to attend a good college or university is pushing them in their academics through high school. By getting good grades and being a strong member of their school and community, kids are able to get very good scholarship opportunities. It can’t be understated that children need to work towards excelling in high school so that they can also apply for these opportunities. Of course, there are also grants and different programs in each state that may provide additional funds for a child to go to college.

Some experts believe that a portfolio which is heavily invested in stocks is the best way to build savings over the long term. As a child gets closer to college age, you can always move that money into bonds or even cash. Remember that you don’t have to save the entire four years of college all at once. There are federal, state and private grants and loans which can help to fill in the gaps between what you’ve saved and the tuition bill.

Mutual funds are another great way to save for college as they’re not quite as volatile as stocks. This means that you don’t have to watch the markets daily to see how your money is performing. As mentioned earlier, the 529 savings plan is also a good way to save for college because it offers tax breaks.

So how do you start saving for college right now? There are numerous ways to start saving for college including doing the simplest things such as garage sales, selling items in online auctions and even taking on part-time job. There is also something to be said for having your child work as soon as they’re able because they need to be contributing to their own future as well.

Remember that it’s also important for you to save for your own retirement even ahead of the child’s college fund. There are many kids who pay their own way through college by working hard and getting scholarships. Depending upon your child’s educational abilities, they should be striving towards getting these grants and scholarships to help offset as much of the college tuition costs as possible. By getting involved in different civic organizations, kids can also get specific scholarships associated with those groups.

If you have a full-time job, check with your employer to see if there are any educational benefits that might be useful for your child. Some offer tuition assistance programs based upon a child’s grades each quarter or semester. These are also great way for the parent to go back to college by using part of their employer’s tuition assistance program.

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