Saving For College


saving for collegeSaving for College – Comprehensive Solutions Offered by Financial Officials

Millions of parents are consistently searching for college savings tips that will allow them to successfully cover the continued education of their children. These are parents that know and understand the costly nature of having children, raising children, and supporting children in the endeavor of pursuing a positive and productive life that will, eventually, transition into a lucrative experience. From the initiation of life, parents find themselves continuously plagued by a wide array of expenses from diapers, formula, clothing, to tuition, tutoring, and medical expenses. The child-rearing and support expenses are typically so immense that it is easy to overlook larger expenses that will occur later in a child’s life, such as college tuition, fees, and supplies that are associated with attending a post-secondary educational facility.

Currently, the average college tuition for a four year university at a public educational facility is approximately $40,000.00; however, it is estimated that, in another eighteen years’ time, the average college tuition will be approximately $100,000.00. This is why savings for college is imperative for parents – regardless of the current age of their child. Today, financial officials are offering many comprehensive solutions for parents that are seeking out college savings tips that will allow them to successfully create the money that will be required for their child to continue their education beyond high school. In this guide, you will be introduced to the top-rated solutions offered by today’s financial professionals.

The Expected Family Contribution

When searching for college savings tips, most families will encounter information on financial aid options. In fact, many families will receive some degree of financial aid in order to cover the costs associated with a college education. As a parent, you should always ensure that you research these options and apply for the programs that are available – regardless of whether or not you feel as if your family will qualify. However, before doing so, you must obtain a good working knowledge of what is referred to as the “Expected Family Contribution”. When colleges go through the process of determining if a student is eligible for financial aid, they always analyze the amount that the family is expected to put towards the college costs.

Not only should you learn about the percentages associated with the EFC, you should also learn about the assets that your family has and how they count towards what you are expected to pay. Currently, the percentages include 20% of the assets that a student possesses, 50% of the income that the student has, and anywhere from 22% to a whopping 47% of the income of the student’s parents. You will be pleased to know, though, that any value associated with 401(k) plans, individual-based retirement accounts, and various types of insurance policies are currently excluded from the EFC.

The 529 Savings for College Account

If you are actively searching for college savings tips to assist you in the funding of your child’s future educational costs, you should consider opening a 529 savings for college account, according to financial officials. This is a type of investment vehicle that offers a positive means of putting aside money for college. Not only do the earnings within this type of account accrue in a tax-free manner, but withdrawals may be made from the account for education expenses without taxation. You must simply evaluate the different plan options that are available and chose one that is most appropriate for your needs.

Once it is set up, you may then start contributing to the plan through manual deposits or automatic deductions. Keep in mind, though, that if a parent maintains ownership over the 529 savings for college plan, 6% of the total value is added under the Expected Family Contribution; however, if a grandparent maintains ownership over this plan, it will not be added under the Expected Family Contribution. Many financial officials advise keeping this little tidbit of information in mind if you expect to apply for financial aid for your child to attend college.

Get an Early and Aggressive Start

One of the most important college savings tips, according to financial experts, is to get an early and aggressive start when it comes to savings for college. A college savings should be treated in much the same way as a retirement savings. You should always ensure that you start as early as possible with the most aggressive savings techniques so that the money contributed has the ability to compound multiple times. As the years draw closer to a point where it is time for your child to start college, you may then transition into investments that are considered to be a bit more conservative.

Conclusion

There are many productive ways that saving for college will allow parents to get a jump start on their child’s future education. By learning about the Expected Family Contributions, investing in a 529 savings for college plan, and getting an early, aggressive start to saving, the money that is placed into a special education account has the ability to compound and grow tremendously over the course of several years. In a world that has over 7 million people trapped in part-time jobs due to full-time jobs being reserved for only those with a high educational background, it is imperative to save now. In doing so, it will set the course for a child’s success as an adult. A college education is more than just schooling where new skills are obtained; it is a step that is necessary to protect their financial livelihood, as adults.

Written by Jon the Saver

This post was written by yours truly, Jon Elder. My mission is to help you succeed in your personal finance life. Join me on the journey to financial freedom! You can subscribe through RSS FEED or EMAIL updates. You can also find me on TWITTER
and FACEBOOK
. Happy investing 🙂

Jon the Saver

This post was written by yours truly, Jon Elder. My mission is to help you succeed in your personal finance life. Join me on the journey to financial freedom! You can subscribe through RSS FEED or EMAIL updates. You can also find me on TWITTER and FACEBOOK . Happy investing 🙂

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