Education is one of the most important things in your child’s life. That is why many parents start thinking about college as early as the child’s infancy. Today, college is expensive and it keeps getting more expensive. Therefore, many parents opt for college funds. So, if you haven’t thought about this before, it is the right time to do so. Remember that it is never too late start a college fund. Even the smallest monthly contributions will be of great help one day.
We have already mentioned that it is never too early to start a college fund. And if you haven’t started already the right answer is NOW. The sooner you start the more money you will have. There are parents who start college funds even before their children are born, in order to raise more money for their college. Tuition prices have gone up by 51% in the last decade. Today, the average fee for a 4-year public institution is somewhere around $15.000. So, plan carefully in order to have at least some part of that sum before it is the time for your children to go to college. There are always many unpredictable things that can affect your capability of investing in college funds. That is why if you have money now, do it now. It will do much for both you and your children.
The biggest reason to go with college funds is interest. There are many different college fund programs which offer great interest. For example, some programs may offer you 5% interest. That means that by contributing $2,000 per year will get you an additional $100. Do this for 10 years and you’ll have 1000$ more than you had at the beginning. The good thing about this is that you are not the only one who can contribute. Grandparents, aunts and uncles can also be a part of it. All you have to do is register their credit cards. Another good thing is that such accounts require low maintenance. The only thing you have to do is link your bank account to the plan and the desired sum of money will be transferred to the plan each month.
The most popular type of these programs is the so-called “529” plan. This is a pre-paid tuition program. When using this plan you can fund one or more years right now, and then use it once it’s time for your children to go to college. What’s great about this is that there are special tax benefits, since this is an education savings plan. No matter if the price of college tuition changes over time, once a year is funded the program is guaranteed to pay for the tuition. Still, keep in mind that this is a pre-paid tuition program, it only covers tuition. It doesn’t include dorming or any other expenses your children might have while in college. Another good thing is that if a child decides not to go to college, the fund can be transferred to other children within the family with absolutely no penalties. Some other options you have are mutual funds, stocks or even saving money on your personal banks account.
We hope this very short guide has helped you make up your mind and choose a college fund. Once you see how easy and useful it is, hardly can you choose not to opt for it. The money you save and the interest you get will be of great help once it is time for your children to go to college. Take this very seriously and start a college saving funds right now.