College preparation
With the cost of college tuition climbing year after year, it is best that parents have a sound financial plan that would reduce the monetary hurdles of sending your kids to college when they reach college enrollment age. In fact, parents can start saving up for the best and highest form of education for their children as soon as their child is born.
Aside from the cash that you have saved yourself, there are additional methods that can be employed to further your money-saving goals and we have shared, in the following paragraphs, a few sources you can look into for getting your kids through college.
To begin with…
- Scholarships – Academic & Athletic
- Grants – Government & Private
- Financial Aid
- Part-time Jobs
- Work-Study Programs
- Student Loans
These are some good alternative sources for your children to utilize before and during their college education; but as a parent, you would not want to be put in those long lines for financial aid or let your child work himself to death just to have money for tuition and other expenses. So you might want to get a jump start at shaving off those hard-earned bucks for your child’s college education.
The earlier, the better
Start investing your money as soon as your child is born. First, put the savings or investments under your name. Later on, decide whether you want to transfer the account to your child’s name by the time he or she turns 15. This way, you will have minimal taxes, if any at all.
However, you need to be careful when transferring account names. Some states require a total turnover of funds once your child turns 18 or 21. This is also ineffective if, in the future, you apply for financial aid. Also remember that tuition fees 10 or 15 years from now may double or even triple the current rates.
Trust fund
Establishing a trust fund for your child is a very wise plan for a child’s parents or relatives to invest in. A trust fund is similar to a time-deposit where the money will be given to your child after a certain number of years. After the designated time, this fund may be received in one lump sum or in accordance with an installment plan.
When building up a trust fund, check out details like interest rates, taxes and withdrawal restrictions. All in all, you need to approximate the costs of tuition and fees, dorm room expenses, meals, books, and other costs that may arise.
Low-risk bonds
Make sure that you invest money wisely as your child grows so that by the time that there are only two or three years before you send your son or daughter off to college, you would have “locked” sufficient enough amount funds in by investing them in low-risk bonds. This way you will ensure that you will get to have enough for them to start their college education.
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