The year your child applies for college is not the time to start saving for their education. To avoid feeling the brunt of skyrocketing college tuition costs and burdensome school loans, it is best to begin saving as early as when your child is born, if not earlier, according to experts in financial planning.
September is National College Savings Month and to mark the occasion, the state of California is reminding parents about its ScholarShare program, which offers college savings account plans to parents wanting to save for their child’s college education. ScholarShare offers 529 plans, which like retirement plans have unique benefits. The money will grow tax-deferred and any withdrawals made to pay for qualifying college education costs are tax-free.
Some tips to tackling your college savings:
—Setting goals is key to a successful savings plan. To identify your goal, begin researching current costs of college and factor in future increases so that you can set a total amount to save up.
—Make sure to save often, and little by little. It might mean sacrificing a few small things, like that $5 visit to the coffee shop, but the sacrifice will prove much more rewarding when you see your child succeed.
—As college gets closer, increase savings annually to stay on track of your plan.
ScholarShare recommends that you don’t do it alone. Make it a family affair. Tell family and friends that you’re saving up for your child and ask them to pitch in if they can. Many 529 plans have “Give a Gift” options that allow others to contributed directly to an account.
To learn more about California’s 529 college savings plans, visit www.ScholarShare.com