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Your child may be years away from college, but it’s never too early to start saving. We’re showing you the best way in this post.
College educations are nearly essential these days. In fact, there are over 5,000 colleges for your child to choose from!
More education means higher gross income for your children once they graduate, too.
Are you curious to know more about the best way to start saving for your child’s future?
Keep reading as we outline the various options you have to pick the best college savings plans for your child or children.
In This Post:
1. The Best Way to Save For College: Education Savings Account (ESA)
Money stored in this savings account will grow tax-free. All you need to do for the initial set-up of an ESA is deposit $2,000 into the account.
Keep in mind when you start an ESA account at the time of your child’s first birthday, you can save for 18 years and accumulate $36,000 for your child to use for college.
2. 529 College Plans
Another option to help your child save up for college is by using a 529 College Plan. Depending on the state you live in, you may withdraw money out of this account for your child to use to pay education expenses.
529 College Plans also include higher contribution rates. You can contribute up to $300,000 into one account over time.
Let’s say your first born child decides not to attend college. The money and investments made with this account can be transferred over to another beneficiary. These plans also grow tax-free.
3. LEAF College Savings
These generous gift cards can be transferred over to any 529 college plan in your child’s name.
Even as toddlers, doting grandparents can send their grandkids money during the holidays and these funds can be used to cover college expenses when the time is right.
Instead of brand new shiny toys, try to encourage your friends and family to donate to a gifting program to help you secure the funds necessary to send your child to his or her dream school.
4. Student Loans
One more option for you to consider as a method to pay for college is the student loan route. If you do not meet the semester requirements to pay for college out of pocket, your child may need to take out loans.
Loans need to be talked about with your child because his or her name will also be attached to the loan after graduation.
Two types of loans are the commonbond vs earnest loans. These loans offer low rates and standard repayment terms and conditions. For each borrower, the total cost will vary. Check rates from both lenders to see which loan sounds ideal for you.
5. Save Money for College Right Now
Make smart moves today and consider these four options as you choose the best way to begin saving money for your child’s college education fund.
If you need to find out more information regarding how to save money for your little ones today, be sure to read through our helpful blog articles. Funding your child’s education should not be so stressful.