Attending college is a big investment. Even community college can cost you a few thousand dollars a year on the cheap side. So, how do you manage to save enough money for you or your child to attend college when most of your money goes to basic necessities? Here are 10 tips to help you save money for college.
1. Start saving now. The sooner you save for college, the longer your money has earn interest.
2. Set up an education IRA. These special IRAs are tax-deferred, and you can put up to $2000 per year per student in them. As long as the money withdrawn is used for education it’s tax-free.
3. Look into a 529 plan. They’re a savings plan that allows you save money for college that can be used tax-free as long as it spent on education, and they have a higher limit than an education IRA.
4. Invest what you save. Low risk investments will still earn more money than keeping it tucked away under your mattress.
5. Don’t try to save the entire four years tuition. By the time you or your child attends college other funding options may be available like grants. Don’t assume you have to save it all before anyone can attend.
6. Check into prepaid tuition. Some colleges offer prepaid tuition set current year’s rate for use in the future. If you know you or your child will be attending in the future you may wish to look into this option. You could save thousands of dollars, even if it does pigeonhole you into one school.
7. Make a budget. Doesn’t sound like a college savings tip does it? However, if you make a budget and stick to it, you might find a little extra at the end of the month that you could stick into a savings account for college.
8. Cut back on luxuries. The less you spend on things that you don’t need, the more you can put into a college savings account or IRA.
9. Look into scholarships. There are many websites out there dedicated to helping students find scholarships. Many of these offer this information free of charge, sso spend a few hours and see what your or your student are eligible for.
10. Check into grants. You or your student might qualify for grants. If sound of money that doesn’t need to be repaid and might be the difference between being able to attend college and having to wait a couple extra years.