Saving For Your Childs College Education

Saving For Your Childs College Education

Paying for college is​ one of​ the largest expenses a​ parent will face in​ their lifetime, other than paying for a​ house. Because of​ this, care needs to​ be taken as​ well as​ special planning and allocations of​ finances in​ order to​ take the burden away from this expense. Starting early is​ the best option, even when your child is​ a​ toddler is​ not too soon. Consider the following timeline for saving for your child’s college education.

When college is​ 15 years or​ more away, then you should open and education IRA that will allow you to​ save conservatively for your child’s college. Also, since there is​ a​ lot of​ time before your child will need the money this is​ the time to​ invest in​ aggressive funds or​ stocks. as​ the time for college nears, you will want to​ save money in​ conservative ways, but now is​ ok to​ be aggressive if​ you wish.

When college is​ 10-15 years away for your child, then there are some additional things you can do. First, consider prepaid tuition plans that allow you to​ pay for college over a​ period of​ time before your child ever reaches the first day of​ school. The problem with this is​ you take the decision away from your child of​ which college they want to​ attend. Also, talk to​ your accountant about different savings plans your state offers for college savings. More than likely, there are some plans that will help you meet your savings needs or​ receive tax breaks. Also, make sure your portfolio is​ more secure and stabilized. Try to​ get your investments in​ order and start saving more conservatively.
At the five to​ 10 year mark, you will need to​ start moving your money into different accounts or​ bonds. For example, bonds are a​ good option as​ well as​ fixed income. if​ you are unsure, talk to​ a​ financial planner to​ help you make the decision.
When there are only five more years until your child enters college, make sure your investments are safe and secure and not in​ any aggressive funds. This is​ the time to​ guard the money rather than risk it​ on aggressive markets.

If you realize that even though you have been saving for more than 15 years, you will not have enough money to​ pay for your child’s tuition, you can consider different student loans that do not need to​ be paid back while the child is​ enrolled in​ school and that have low interest rates. There are loans available for the parent as​ well as​ the child, so whatever works for your family is​ the best option.

Also, once your child is​ actively enrolled in​ college there are different tax breaks that you can file on your tax return that will help out significantly.When it​ comes to​ paying for college, starting early and making a​ plan is​ the best way to​ go about it.

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