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7 money-saving strategies that can boost your kid's college fund
It's no secret that college is expensive. According to College Board, the average cost of tuition at public universities across the U.S. currently stands at $24,000, and private institutions unsurprisingly cost considerably more, with an average tuition rate of a little over $32,400. Consequently, if you're a parent with young children, it's a wise move to begin thinking about saving for your children's future college careers. And given that extortionate tuition fees will likely continue to rise, it's never too early to open that savings account.
Saving for college can often be struggle though, given the many other expenses your family will likely face - think health insurance, mortgage payments and the general cost of living. Thankfully, there are a number of simple money-saving strategies that you can employ to boost your children's college funds. Take a look at seven of the best:
1. Plan for the extra expense
Setting aside money each month is easier than you think, especially if you plan for the extra expense of college. After all, if you examine your finances with a fine-tooth comb, you'll likely be surprised to find that you spend a significant amount of money that you don't need to each month. For example, buying lunch at work every day can easily set you back $50 a week, or you may be paying for a magazine subscription you don't need every month. If you plan for ways to reduce frivolous expenses and then set aside the extra money to go in a college fund, you'll be on a path to savings success. As Fidelity Investments explained, it can be easy to categorize college saving as an expense that is low priority, especially if your children are infants. The key is to break out of that mindset. Regard paying into the college fund as a mandatory expense, in a similar vein to you phone bill or car insurance payments. Once you view the fund in this way, you'll begin to find that you are more dedicated to finding the money each month.
2. Consider a 529 plan
According to U.S. News & World Report, 529 savings plans are one of the most common ways that families save for their children's college educations. The plans are offered in every state, although the source noted that the benefits of 529 plans are by no means uniform: Some states will offer better deals than others, and there's no legal imperative to open a 529 plan in your state of residence - it can pay to shop around. The reason why 529 plans tend to be a great options is because they typically come with large tax breaks - for example, in many cases you won't be required to pay federal tax on money that you invest in the plan. Of course, the downside to 529 plans is that they aren't free. Each plan will have certain fees, so it's important to conduct extensive research beforehand about the kind of plan that will be best for your family.
3. Start as early as possible
Of course, it's a no-brainer - the earlier you start saving for your child's education, the better. As Fidelity Investments detailed, if you start saving within the first year of your child's birth, or even before that, you'll have roughly 18 years to accumulate as much money as possible, and the necessary monthly payments into your savings account can be lowered. The source offered a compelling example: If a family starts saving for a college fund as soon as a child arrives, using a 529 plan they'll only have to pay a little over $100 a month in order to reach a goal of $50,000, which can go a long way to helping a child through school.
4. Automate payments
If you struggle to keep track of your finances and find yourself overspending each month, then a great strategy is to remove the temptation altogether by setting up an automated payment system, the Simple Dollar advised. Have a select amount of money taken directly from your check each month, so that you don't end up spending the money on something frivolous or forget to pay altogether.
5. Ask for gifts
Each time a holiday rolls around or your child has a birthday, ask family and friends to donate a little money into your child's college fund, Simple suggested. It doesn't have to be for huge amounts, because even small donations over time can pay dividends in the end. As the old adage goes - every little bit helps! The source noted that many 529 plans offer ways for outside parties to make donations, so that's definitely something useful that your family should investigate.
6. Have your children help
When they are old enough - of course - have your children find part-time work and have them contribute to their own college fund, U.S. News & World Report advised. Not only will this help you out, it can also help teach your children about finances and fiscal responsibility.
7. Consider joining Opinion Outpost
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There are a number of easy ways to make some extra cash for your child's college fund, many of which can be found online. One truly great strategy is to sign up with Opinion Outpost. Upon joining you'll be able to take paid surveys online, from the comfort of your own home. Payments can take the form of cash or gift cards that can help with purchases from online stores such as Amazon and iTunes. It has never been easier to make some extra money! For more information about Opinion Outpost, click here.