Putting your kids through college is a big ask, but it’s something that so many families strive to achieve. With tuition constantly on the rise, it can be hard to know when and how to start saving and how to access scholarships.
When it comes time to send your kids off to college, Scholar’s App is the best resource to connect them with the right scholarships. Easily create a profile, search for scholarships, and submit applications online! Using a scholarship application management service lightens the load on both you and your student. However, before applying for scholarships, you should start saving for your child’s college education as early as possible.
When to Start Saving
This might sound crazy to some, but it’s ideal to start saving for your child’s university expenses as soon as they are born (if not before)! Others claim that saving for college should begin after your child starts school to avoid paying childcare expenses and college savings simultaneously. Regardless, the more time your savings sit in the account, the more interest it will accumulate and the more money you’ll be able to withdraw when the time comes.
For the average American family, each year at an in-state college costs $20k all-inclusive. An out-of-state public school costs nearly $24,000 annually in tuition alone, and private non-profit universities average $32,500 for tuition and $44,000 including room and board. These numbers might be intimidating, but it’s feasible to save a large amount of money if you start early and stay committed.
How to Start Saving
Creating a savings plan can be daunting for first-time investors. You can start by using a savings calculator to understand how much you’ll need to put in and how often to get the results you want.
Whether you choose to go with a 529 plan, a custodial or savings account, or a Roth IRA, it’s crucial to have an institution that regulates your savings and generates interest on the money you’re investing. According to Citizens Bank, the benefit of using a 529 plan is that “any earnings are exempt from federal taxes when it comes time to withdraw, assuming the funds are used for education expenses.”
To start saving, talk to an advisor at your bank or open a college savings account with an investment firm.
Finding the Best Savings Option
Like we’ve said before, saving for college can be overwhelming, but we’re here to help. Finding the best savings option requires consideration of several factors, including which options are accessible to you as well as your state’s tax breaks on eligible savings plans.
It’s also important to consider what level of flexibility and access to funds you may need in the future. This can include when you can withdraw funds, to whom they are allocated, and the expenses on which they are applied.
Some funds don’t allow other family member contributions, have a contribution limit or allow joint ownership or account transfer! Do your research and consult a financial advisor before opening a college fund to save yourself some stress.
Saving for college is an essential step in supporting your children through higher education, so get started early and make sure you do it right! A scholarship application management service makes paying for college easy when combined with your child’s college fund. Check out Scholar’s App to connect your student with the best scholarships to support their dreams and ease the financial burden of college on your family’s shoulders.