There is no question about it, college is expensive! As the years go on, college tuition will keep rising, but parents don’t have to be the only source for college savings. It’s important to get your kids involved in saving for college when they are young. It’s never too early for them to become financially responsible.
Little by little, your child can start building up their own savings fund. This will not only get a head start on college savings, but it will also help them establish good money habits for the future. Here are some great tips to help your child get started on saving for college.
Apply for a Scholarship
If your child excels in athletics, academics or any extracurricular activities, they should apply for a scholarship as soon as possible. Scholarships are basically free money for college tuition that you don’t have to worry about paying back.
Take AP Classes
Why not earn college credits while still in high school? Advanced Placement (AP) classes give students a leg up to earn college credits while they are still in high school. Each AP class taken in high school is one less college class you’ll need to pay for and one less textbook you’ll have to buy for college. Taking AP courses will also help prepare your child for college-level coursework and could help your child reach the college finish line quicker.
Make Money
Whether your child takes on a summer job or part-time work during the school year, they will be able to save money for college as well as gain work experience to put on their resume.
Open a Savings Account
Opening a savings account for your child will allow them to have a safe place to keep their money when they are making it. Keep in mind if your child is under 18 years old, you’ll need to be the joint account holder.
Save, Save, Save!
Encourage your child to put the majority of their money from birthday money or allowance into their savings account so they aren’t tempted to spend it.
Use Savings Bonds
Family members and friends may give your child savings bonds for their birthday, communion, confirmation, bar/bat mitzvah or another special occasion. The best thing about bonds is the interest. The bond(s) will be worth more than the amount initially paid when it comes time to pay college tuition.
529 Plans
529 Plans are becoming a more popular way of saving for college. Depending on the college your child is looking to go to, that specific state may have a 529 Plan which allows parents to set aside money for future college expenses. Another benefit to the 529 Plan is that it will cut down on current taxable income.
Prepaid Tuition
Depending on the college your child is seeking out, sometimes colleges allow parents of future students to prepay tuition. This could be a great alternative to standard fixed-rates since these plans essentially grow at the rate that tuition rises.
