For many parents, preparing their teens for college is a top priority. In addition to the lifestyle changes and career choices that teens have to make, parents also have to deal with the elephant in the room; the cost of a college education.
Indeed, your children will likely pay twice as much, if not more, in tuition as you did when you went to college. Therefore, saving money for your teen’s college career should start early and it should follow a strategic plan. Here are several tips to get you started:
Invest in Your State’s College Savings Plan
Most states offer a savings plan that allows you to put money aside towards your child’s college expenses. Commonly referred to as 529 college plans, these savings plans allow you to put money aside and to withdraw the funds that you have saved, tax-free, in order to apply them towards college related expenses.
The specific fees and operating costs for each state may vary, but they offer an effective-and-reliable way of saving early for college.
Take Advantage of Prepaid College Tuition Plans
Prepaid tuition plans allow you to lock in the current tuition rate being charged by colleges before prices are inflated over the years. This means that if you pay $5000 towards your child’s tuition and the yearly cost is $15,000, you will have secured a third of your child’s tuition costs at the current rate, regardless of how much it will have increased by the time they attend college.
Seek Out Investment Opportunities
Investing in a CD or Money Market account allows you to earn interest that you can put towards your child’s college-tuition. The key to proper investing is to start early, work with an investment expert, and be patient in expecting returns.
Seek Out Credit Cards that Offer College Savings Incentives
There are some credit cards offering cash-back-rewards that can be directly credited to your 529 college savings plan. Depending on your level of purchases, you can have a certain percentage of those purchases directed towards your 529 account.
You can also have other family members link their credit cards to your savings plan, enjoying a further boost to your teen’s savings account.
Heritage Bank offers several great options to assist you in your plan for higher education financial planning for your child, such as CDs and Money Market accounts. To learn more about these options, click here: https://www.heritagebank.com/personal-banking/.
As a Branch Manager, Kay helps personal and business clients by providing products and services designed to meet their individual needs. A dedicated volunteer with the City and County, she has over 33 years in banking and a vast knowledge of financial services. Kay is able to provide financial counseling through consultative conversations as a part of her role. Whether your needs are deposit or loan related, contact Kay and see how she can help with your individual financial security!
Asst Vice President & Branch Manager • 770-515-7073 • [email protected]