Saving for college can be stressful. With the tuition costs increasing every year, it can be challenging to decide how and what to save, and saving enough for the full cost can take significant financial planning. Whether you’re well on your way or just starting to figure out how college savings fit into your budget, here are a few simple hacks that can help:
1. Make it part of your budget
Budgeting can help you figure out how much you’re spending and where you can save. If you’re new to budgeting, this can be a good time to figure out what type of budget you’re able to stick to, what tools work for you, and how college savings can fit into that budget.
If you already budget regularly, take a look at your expenses and think about what you can afford to put toward college each month—consistent contributions, even if they’re small, can really add up. This is also a good time to re-evaluate where you’re spending and decide what you can cut.
Once you decide how much you want to contribute, it can help to set up automatic withdrawals with your bank that move money into a savings account or other account used to hold college funds. This way, you don’t have to think about moving your money around, and you’re not tempted to use the funds.
2. Consider a 529 or other tax-advantaged account
Once you’ve decided how much you can save for college on a monthly or yearly basis, you can make strategic choices about where to save and invest that money. There are several tax-advantaged accounts designed to help you save for college, including 529 plans and Coverdell Educational Savings Accounts.
3. Consider prepaid college tuition
Wouldn’t it be great if you could freeze tuition prices now and pay it later? Some states offer 529 prepaid tuition plans. These plans lock tuition costs in at today’s rate, and can be a good option if your state offers it and you know your child will go to an in-state college.
4. Find Scholarship opportunities
When it comes time to apply for college, scholarships and grants, academic or otherwise, can be a great way to ease the financial burden. Plenty of schools offer full or partial scholarships based on grades and test scores.
You can also help your child find and apply to scholarships specific to their talents—there are tons of them out there, whether your child excels at sports, academics, the arts, or something else.
Flexibility is key
Saving for college can involve several strategies, including budgeting, college savings accounts, and looking for scholarships specific to your child’s talents. With increasing tuition prices, it’s important to stay aware of your options, be realistic about costs, and remain flexible.