Education plays a major role in surviving in this turbulent world. When the economy gets bad, and jobs are hard to find, one of the things that employers will look at is the educational achievements of the applicant. These days, a college degree is preferred for the majority of jobs. Therefore, it’s a good idea to get organized in advance of seeking out a college for your children. It’s important to understand personal finance and how to save for college.
The costs of colleges differ greatly around the country. However, make no mistake – it is a major investment. In the recent past a college education in total could be financed for around fifty thousand dollars, making it relatively manageable to make steady investments to achieve this goal. These days, with increasing tuitions, it may take that much just to pay for one year of education! With inflation growing steadily, it appears getting a college education is just going to be more and more expensive. So, what can you do about it?
Start by saving. Look at ways to save money – the type that just sort of disappears. It’s amazing how quickly some small savings will add up. A good way to go about this is to eat more meals at home. The average American eats out a lot – including breakfast, lunch and dinner. So a great way to save is to pack your own lunch, and cook your own dinners at home. Not only can this help you save but it is probably much healthier too as you have more control of what you eat. Also, brew your own coffee. Coffeehouses charge a lot for their drinks. Some of these fancy designer drinks don’t leave you much change out of five dollars. So, put the money you save on food and drinks into the college fund.
Start a college savings account and determine how much per month you are going to put into it without leaving you with debt or bad credit. Make sure this money goes promptly into saving, and is not used for other purposes. Once you have determined the monthly amount then stick to it. Set up an automatic withdrawal if that helps. If you cannot make the payment one month – find a way to make it happen! Sell some unused items on ebay, host a bake sale, take on some extra consulting work – do whatever it takes to keep a regular amount going in to savings. And of course once it is in savings – leave it well enough alone! Don’t be tempted to use it for something else.
You may want to take things a step further and invest the savings in a mutual fund or another type of investment. The best way to do this would be via a financial expert who can guide you in the right direction. You want to make sure the investment is relatively safe so that you do not risk losing a portion of the college funds. Your financial adviser can help you if you want to set up an education savings account or a custodial account. Both have incentives that may be worth exploring to help your child’s college fund.
There are other plans worth considering. These include prepaid tuition plans. These are designed so that you can pay your child’s education at today’s rates; however, they are not transferable amongst colleges. The college saving plan is similar, though fees are not locked in, and they can be used for any accredited college.
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