2 Ways to Start Saving for Your Child's College Years

27 November 2019
Categories: Finance & Money, Blog

When your child is born, you want to make sure that you are doing everything you can to set them up for a better life. One of those ways is to make sure that they have money for higher education of some kind. There are a lot of ways that you can do that.

Savings Account

One way that you can do that is to set up a regular savings account. You can set it up in your name and in your child's name, and put money into it monthly or weekly. Because it's a savings account, you will earn interest on whatever money you happen to put in. If you start it early, then you have many years of interest that can build up on top of whatever money you put into the account. It may not be enough to pay for their entire higher education career, but it will probably be enough to give them a lot of help, which can help keep their college debt down and give them a better start at life.

529 Plan

A 529 plan is designed specifically for saving up for higher education. You can start it when your child is born, and place money into it as your child ages. These accounts can be used for their college or higher education plans, as well as K-12 education if you want to send your child to a private school or academy instead of a public school as they get older. There are a lot of benefits to using a 529 plan. One of them is that there are a lot of tax benefits for you. For example, you may be able to get tax-free distribution options. Depending on the state, you may also be able to get certain incentives when it comes to taxes, including things like credits as well as tax-free donations into savings accounts. When you go to open one of these accounts, you will want to make sure that you are checking into penalties. You may get some penalties if you withdraw money that doesn't go into education, so it's important to make sure that you have proof as to where the money is going.

Making sure that your child is doing as well as possible in their adult life takes a lot of work and patience. You want to do everything you can to make that happen. One of those things is to make sure that they have money for higher education, whatever form that takes.

About Me

People warned me about taking out short-term loans, especially payday loans. What I found is that if I manage them responsibly, they come in very handy. On more than one occasion, these simple loans have helped me out of difficult situations. They took care of emergency car repairs, and provided the cash I needed to pay bills and avoid incurring late fees. I always repaid them on time, and the lender rewarded me by increasing the limit on how much I can borrow. If you are thinking of securing a payday loan, let me tell you what to look for in a lender. I'll also help you understand the commitment that you are assuming. With responsible use, I know you will find these loans as helpful for you as they've been for me.