Educational Savings Accounts

Educational Savings Accounts

Educational Savings Accounts
When it​ comes to​ getting a​ college education, financing is​ one of​ the most important considerations that you will need to​ make .​
Unfortunately for far too many it​ is​ one the last considerations that is​ made when it​ comes to​ the educations of​ our children .​
If you are a​ parent you owe it​ your child and yourself to​ plan ahead and plan carefully in​ order to​ cover the cost of​ your child's education .​
There are fortunately, a​ few great ways in​ which you can do this .​
The most common is​ to​ begin by opening up an​ educational savings account for your child (under the age of​ 18) .​
When you open up an​ educational savings account for your child, you can contribute up to​ $2,000 per year per child .​
This is​ a​ combined total contribution however and includes the contributions of​ grandparents, friends, and family in​ addition to​ your own personal contributions .​
The money from these funds can be withdrawn tax-free as​ long as​ they are used for educational purposes.
Educational expenses in​ this case include books, tuition, fees, supplies, and college room and board provided that your child is​ at​ least a​ part-time student .​
If you do not use all the funds for your child there are options as​ far as​ what to​ do with the remaining funds in​ the account .​
The first option would be to​ leave the funds in​ the account and allow the account beneficiary to​ withdraw them up until the age of​ 30 .​
There is​ a​ penalty involved and the beneficiary will be required to​ pay income tax on those funds .​
You could also elect to​ roll those funds over to​ the next child under the age of​ 18 who will have educational expenses in​ the future.
The money you set aside in​ these accounts to​ cover the cost of​ the education of​ your child or​ children is​ not tax-deductible however, it​ is​ a​ great way to​ begin saving money and investing in​ the future of​ your child .​
If you begin investing the maximum amount $2,000 per year upon birth your child should have a​ nice nest egg to​ help cover educational expenses .​
If your child is​ fortunate enough to​ qualify for scholarships and other sources of​ financial aid you can turn the funds over as​ a​ graduation gift or​ save it​ for the next college student in​ your family that comes along .​
Either way you've saved yourself a​ good part of​ the worry that goes along with providing for your family by having this fund set up for your children.
You can sign up for programs like Upromise in​ order to​ subsidize your contributions with donations from corporate sponsors as​ their way of​ thanking you for buying their products or​ using their services on any credit cards that you, your friends, and your family members have registered to​ go into your child's account .​
Every edge you give yourself when it​ comes to​ investing in​ the education of​ your children is​ an​ edge worth having .​
College tuition rates are rising at​ an​ alarming rate while corporate expectations of​ college degrees are rising at​ the same near lightening speed .​
This means that a​ college degree is​ more critical for our children than in​ any past generations .​
Take the time now to​ check into securing the future of​ your children by establishing an​ educational savings account .​
Let friends and family know that any gifts they are planning to​ give your children that involve money would be appreciated if​ they instead invested in​ the future of​ your children rather than the now .​
You can also ask your friends and family to​ sign up their credit cards with Upromise in​ order to​ provide a​ little bump in​ donations to​ your child's college savings account .​
These little steps add up to​ significant savings over the course of​ 18 years .​
You just might find that the investment you are making is​ adequate to​ cover the costs of​ your child's tuition in​ full.

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