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Many parents today have the desire to start a college savings fund for their children, and are well aware of the high cost of a college education. In 2011, the average full-time tuition for a student to attend a four year public school exceeded $8,000. Tuition at a private university far exceeded that amount, and they continue to grow. This cost will likely be significantly higher when your own children enter college. Parents of multiples will face an even greater financial challenge when it comes to paying for college. Starting a savings fund now can help decrease the financial burden you may face during your children’s college years.
One of the biggest problems many parents face is finding the available money in their budget to get a savings fund established. The cost of raising one child is significant, and parents of multiples are burdened with child costs that are two, three, or more times as much as parents of a single child face. A financial benefit of having multiples, however, often comes to parents when they file their tax returns.
Along with the individual deduction, parents of multiples may also benefit from the Child Tax Credit, a childcare deduction, and other related tax benefits. Your tax refund provides you with the perfect opportunity to get a college savings fund started. It’s an easy way to get money into college funds without stretching your regular income any more than it already is.
Research the Options
Once you learn that you have a tax refund on the way, you can start researching college savings programs to find one that is best suited for your needs. Many parents do like to have some control over how the funds are invested as well as the ability to withdraw funds in the event their child gets a full scholarship or decides not to attend college. A 529 plan is a common plan, but there are several of these plans to choose from.
Each state offers its own plan, and some states offer several different plans. You can choose to use the plan in your own state or another state. The plans generally include prepaid tuition plans and savings plans. Prepaid tuition plans essentially allow you to lock in today’s tuition rates and fund the education based on today’s prices. Savings plans allow your investment to grow over time, and you will pay tomorrow’s tuition rates.
Find Funds for Regular Savings
While researching the options available for college savings plans, you should also consider how you will continue to fund the plan. Many plans offer flexibility with regards to funding the plan. For instance, you may decide to continue to use tax refunds as your sole source of funding in the future. Many people, however, find that they can adjust their budgets slightly to find even a moderate amount of money to contribute to the fund regularly.
When you are the parent of multiples, it seems that most everything in life requires some degree of planning. From how you will manage to get two or three crying infants to sleep in their first few months of life to how you will pay for college when they are young adults, having a plan just seems to make life go more smoothly. Planning today is key to providing your kids with the college education they need in the future.
Rodger Black is a tax consultant and occasionally blogs for taxfix.co.uk, a site where you can learn how to claim tax back! Using their tax calculator, people are claiming tax back every day!