The best advice is from the people who’ve gone through something before. So, if you’re planning to save for college, you’ll want to hear from other parents already saving.
We asked current account owners saving in Private College 529 Plan to share their own tips and advice to help parents just starting out. See what they had to say. You might be inspired to start saving yourself.
1. Start early
“Start early. As soon as you get your child’s social security number.”
Starting early means you’ll have a longer runway to save, and more time means more money set aside for college. But don’t stress if your child is in grade school or higher. It’s never too late to start saving for college. Just start wherever you are.
2. Save consistently
“Save however much as you can on a regular basis. Even $20 a month adds up.”
While $20 a month doesn’t seem like a lot, it adds up into thousands of dollars over the years. So, imagine what you can do with $100 or more a month. Start contributing to your child’s college education and watch your savings grow.
3. Get family and friends involved
“Ask for college money from family rather than baby clothes or toys that they outgrow quickly.”
Having kids means receiving gifts several times a year for holidays and “just because.” Switch things up by asking for contributions to your child’s college savings plan. Family and friends love to give, and they also want to help the parents out. A prepaid tuition plan like Private College 529 enables account owners to easily set up gifting events for each account.
4. Look at tax benefits
“Check tax benefits and fees of a 529 vs IRA (in state vs out of state).”
Taxes are a part of life. But with a college savings plan like a 529, there are generous tax advantages to consider, which can lead to even more savings. Contributions grow tax-deferred, and withdrawals are tax-free when used for qualified expenses. Before you land on a college savings plan, see what the tax benefits are.
5. Set a reasonable goal
“Don’t become overwhelmed with the entire cost of college. Focus on saving for one week, month or semester at a time and celebrate those savings milestones.”
Every parent needs to hear this: you do not need to save for four full years of college. Between financial aid and something called “tuition discounting”, most families do not pay the full sticker price for college. Set a savings goal to get started. And as your child gets older, you’ll have a better idea where they’ll go and what the costs look like. Check out this video with a holistic financial planner to set your savings goal.