College education is getting quite expensive these days in most parts of the world. Engineering and medical studies fees have sky rocketed, due to the ever increasing prices of materials and equipment, necessary for the studying of these subjects. That’s why it’s crucial to start saving as early as possible and invest wisely to make the most out of your savings.
There are many available plans as far as saving for college is concerned, therefore it is crucial to find out which one works best for you but generally a combination of financing methods works best. It’s always a good idea to speak to your financial consultant or accountant before taking any course of action. Here are some tips to help you save for college:
1. Start saving for college as early as possible. Funding your child’s college education sure seems like a daunting task now, but if you start early you can save a substantial amount of money relatively easy – compound interest only works if you give it enough time to work. But even if you were unable to start saving early, don’t panic – there’s financial aid available for students and many tax benefits for college savings.
2. You can take advantage of 529 plans. New York’s 529 plan offers a wide range of investment choices, tax-free withdrawals when used for qualified college expenses, and contributions which are tax-deductible for NY State residents. Since these plans allow you to invest the money just as you would for retirement, it also means there is some market risk. As with any investment, there is a chance that your assets might decline in value.
3. Look into stock options. Even though it may appear a bit risky, the potential earnings and therefore savings could be higher if the right decisions are made at the right time. Again, consult a financial professional before investing your money in any accounts or stocks.
4. A great number of financial resources in the form of financial aid is available to make your dream of a college degree a reality. The two basic categories are gift financial aid (scholarships and grants) and self-help financial aid (student loans and work-study programs). Financial aid can be federal or campus-based; most students use a combination of the two.
5. Be well informed. Know what might be available to your college student in the form of financial aid and how to apply for it. Make a plan to estimate what the total cost of your child’s education is likely to be, and start from there.