Tuesday, April 2, 2013

4 Ways to Budget for Your Kid’s College Fund

The cost of college is constantly on the rise, but kids still need to get a degree to compete in the business world. That’s why it’s important to start saving now to pay for it. Yes, there are scholarships and financial aid, but those don’t usually cover all of your child’s expenses. So, take a look at these four ways that you can start saving and budgeting for your kid’s college education now.
College Fund Image via Flickr by Tax Credits

Put Money Aside from Each Paycheck

The easiest way to start building your child’s education fund is to put money aside from each paycheck. Banks make it really easy to have automatic withdrawals into other accounts. So, you can set your bank account up to withdraw a certain amount every time you get paid. This is a great way to save for your child’s college education, even if you’re only withdrawing a small amount each time. Something as little as $20 per paycheck can add up to $2,500 in only five years, plus there will be interest on top of that.

Save a Percentage from Bonuses

If you can’t afford to put money aside from each paycheck, you can do it whenever you get a bonus or come into extra cash. For instance, lots of employers offer bonuses during Christmas and other times of the year, and you can use a portion of that money to start saving for your child’s education. Your tax refund is another great time. Using bonuses is smart because you don’t miss the money because you’re not use to having it.

Use the Pocket Change Saving Method

If you don’t have a lot of money to put aside for your child’s education, there are little ways you can try to save. For instance, you can place a jar in your home where you put all of your spare change. So, if you buy lunch for $6.50, you come home and put the change (50 cents) into the jar. Then, when the spare change jar is full, you deposit all of the money into your child’s college education fund. A few cents here and there might not seem like a lot, but they add up over time. Plus, saving some money is better than no money.

Invest the Money in an Interest Bearing Account

Once you have a small chunk of money dedicated to your child’s college education, you should invest it in an interest bearing account. Standard savings accounts are fine, but Fisher Investments (FI) can help you make even wiser investment choices. There are several types of accounts that have variable amounts of risk that you can use to grow your child’s education fun. Here is the contact information for FI to get started.

Scholarships are the best way to pay for college because they are free money. However, getting a scholarship is difficult because they are so competitive. You should be saving money for your child’s education to supplement any scholarships or financial aid that they qualify for. Do you have any other tips on how parents can budget and save for their child’s education?

  Resources:

http://www.goodhousekeeping.com/family/budget/college-money-saving-strategies
http://budgeting.thenest.com/set-up-college-trust-fund-4392.html

Author Bio:
After finishing my B.A. in English from the University of Utah, I pursued freelance writing and editing as a career. I mainly focus on technical writing (business proposals, manuals, and trainings), but I also enjoy being creative and sharing my knowledge with the world.

I enjoy learning about everything, but my favorite subjects to write about are technology, finance, and crafts. You can read about some of my crafting adventures at www.sewingandcraftcorner.com.

1 comments:

Jonalyn Quita April 2, 2013 at 7:07 PM  

Anxiety over how we can pay for our kids' college education struck me recently when I was scouting for an elementary school for my boys. This is so right. Saving up each penny even how small, add up over time. Yet I dont do it. It's not too late I guess. Thanks for the publish! And glad to be back here in your blog mom Shy!

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