In the 2012-13 school year, the average cost for college tuition was $22,261. With costs rising about 7% each year, the thought of saving enough money for your kids’ college education can be overwhelming and seem almost impossible. But there are steps you can take when your children are young that will help you save more money toward costs and make the most of your investment. Here are 5 tips for saving money for college.
You Don’t Have to Save it All
Before getting really overwhelmed, remind yourself that you don’t have to provide every single cent for your kids’ education. There will be grants, scholarships, and aid money available for your children and you.
Do Your Research
There are many tools available for you to calculate what the estimated costs will be when your kids head off to school. You can also research grants, scholarships, and financial aid. Knowing your options will help you have a more accurate picture of how much you have to save and you’ll also have a go-to list of people who will be able to answer your questions and provide information.
Start Saving Early
Start saving as soon as you can. Even if you’re only able to save a small amount of money, every little bit helps. For example, saving just $50 a month in an account that earns about 7% interest, starting when your child is born, can result in about $20,000 in savings by the time the child is 18. Not only will getting into the habit of saving make it easier to continue to do, it will also allow you to effectively invest your money to get a bigger return.
Seek the advice of a financial planner or investment professional. They will be able to advice you on how to make the most of your money and get the most out of your investment. They will help you decide whether or not to invest in a 529 plan, in stocks or bonds, or in mutual funds.
Involve Your Kids
Once your child reaches high school, start having conversations about their plans for college. Discuss the costs and how much you’ll be able to help them and stress the importance of scholarship. Getting your children involved will help them appreciate what you’re able to help with and if they are responsible for helping, they will be that much more invested in their education.