Tips To Help You Save For Your Kid’s College Education
Majority of students have college student loan. It means that even after graduation, they are still owed on federal and private student loans.Even if the loans are useful, also they are a big burden.However, it does not mean that your student should study on college student loan.You need to start preparing for the education of your child. You should save what you can to reduce the burden of student loan. Read on to get tips of how you can save for your child’s higher education.
You need to keep in mind that each penny means a lot. The earlier you start saving, the bigger the savings will be. Come up with a budget that you can stick to so as to grow your savings.Figuring out your expenses will help you know where to cut back on such as medication, utility, entertainment and transportation. The first savings may be small but with time they will grow.
Consider the benefits of Roth IRA.Roth IRS is an individual retirement account that covers college costs. The money grow free of taxes.You can use the money to invest in stocks and bonds. Withdrawing contributions from Roth IRA is penalty free.
Consider opening an education savings account.If you have the capability of saving $2,000 or more, it is best to opt for an education savings account instead of the regular savings account.The plan is free of tax.Making withdrawals that are related to education expenses is tax free.You can also choose several investment options.You have the flexibility of growing your money.
Also, consider setting up a 529 education savings plan. It is a great alternative if you don’t qualify for an education savings account. 529 plan offers the choice of withdrawing against different college costs. It covers room and board apart from tuition.Once the money is withdrawn, it can be used in different universities and colleges.529 plan gives you the option of changing the named beneficiary.
Consider an educational trust fund for your child.You can name your child as the beneficiary and a different person a trustee. The trustee is the one who will make sure that your funds go towards the education of your child. Your kid needs to show the bills to the trustee.
Another way is to become a rental property owner.You still get to make money on the side when working. The more the tenants stay at your property, the more money you make.
In addition, master the art of house hacking to save money for the entire family. House hacking refers to others making payment of some or all of your housing costs. You can start with the property you have if you don’t have cash to buy rental properties.