- Personal Finance»
- Paying for College
Four Simple Ways to Save for College
Once you have decided that the financial priority for your family is saving for your child’s college education, the next step is to develop a plan to make it happen. Here are four simple ways to start saving for college education and setting up a college fund:
1. Examine your budget
If you have never planned your budget, this is the right time to start, as child education plays an important role in every parent’s life. Planning the budget will show how much you are spending now and where you spend your money, so just by knowing these two things you can calculate how it might begin to make even small changes to accumulate some savings. Make an interactive budget worksheet to estimate and begin working on your budget.
2. Keep it simple - make it automatic
It is much more likely to accumulate a significant amount of savings for your child’s college education by maintaining a discipline or in simple words being consistent with your savings. Instead of waiting for the moment in which you have “a little more money, then save”, build the habit of saving even $50 per month or each paycheck and put this money into a savings account for college funds. The huge benefit of accumulating savings like this is that you will automatically earn interest on your savings which will increase (grow at a faster rate), ensuring that you will have even more money for your child’s college costs. Ask your employer or your bank about how to make your money automatically deducted from your paycheck and get deposited in your savings account for college. One way of doing this is signing up an application for automatic fund transfer with your employer’s bank.
How to Set Up a College Fund?
3. Deposit extra bonuses
When you or your spouse receive a bonus as a reward for your work, an extra fee, or a refund on income tax, consider depositing that sum for your child’s college education. Also, you can get the grandparents involved into this. Encourage your child’s grandparents and other family members to make a tax-deductible donation to a recognized educational society.
4. Submit exams to obtain credit
If your son is a college student and gets a high enough score on an AP exam (Advanced Placement Program), he/she can get a free credit for college. Your child should consult the school counselor to learn more about AP courses and exams.
The above were a few ways to start saving for college education and setting up funds for college. There are many other ways of savings that you can utilize for your kid’s education. Always remember education plays a vital role in your kid’s life so don’t leave any chances that you are not able to provide your child what he/she needed.