Saving for college can be daunting. The cost of putting a child through public college is equivalent to that of a median-priced home today. Saving that amount of money is an uphill task for most families living from paycheck to paycheck. That’s why it is important to know how to successfully save for your child’s college education.
These eye-opening figures have forced many parents to take a new look at how to help pay college bills without sacrificing their financial future. In this blog post, we share some of the most successful college saving strategies witnessed so far.
The first tip when learning how to save for your child’s college education is to start as early as possible. In fact, the best time to start saving for your kid's college education is when they're born. Don't wait until they start school or when you have a huge income. Start small and start right now.
Most parents often make the mistake of thinking the small amount won't do much. But in reality, it can help your kids pay for part of tuition or even cover books. That way, they don't have to take huge student loans as they would if you had nothing to offer.
Prioritize Your Retirement Savings
When thinking about your child's future, you can easily forget about your future. You will often ask yourself whether to prioritize college savings or retirements. With a lot of emotions wrapped up in that conundrum, it's easy to make the wrong choice.
Financial experts often recommend putting your retirement savings first. Retirement is a necessity. You will depend on your savings for food, clothing, and shelter- the basics.
Set A Realistic Savings Goal
Saving for college without jeopardizing your retirement starts with having realistic goals. So take a moment to look at your income and expenses. Look at your budget. How much can you save for retirement and college?
Find ways to stretch your budget and cut costs to save more. Parents who don't set realistic goals often end up feeling frustrated and getting overwhelmed. Remember, it's better to save tens or hundreds of dollars than to target a thousand dollars a month and save nothing.
Automate Your Savings
Once you set your savings target, it's wise to automate your savings in order to successfully save for your child’s college education. Set up separate accounts for college and retirement savings and automate deposits every month. That way, you will pay yourself first and save for college before spending the remaining amount.
If you don't automate your savings, you may be tempted to spend what you earn and save what's left. And you know that isn't practical.
Use Bonuses And Other Windfalls
Most parents saving for college are also looking for a variety of sources. And bonuses, earnings from side gigs, tax refunds, and other windfalls are boosting their savings.
So if you suddenly have extra income, resist the temptation to spend it. Deposit such windfalls in your college savings immediately.
Get A Little Help From Friends And Family
Some parents also say they ask for help from friends and family to boost their college savings. If you borrow a leaf from them, you must be creative.
For example, request your friends and relatives to contribute to college savings instead of giving material gifts.
Ask Your Kids To Help
Increasingly, most parents are requesting their children to contribute to college costs. And most high school students are responding positively.
According to a study conducted by College Savings Foundation, over 80% of college students are willing to share college costs with their parents.
So if your child is old enough, involve them in the conversation about saving for college. Start by setting a dollar amount they can afford and work with them to find ways to boost their income. Perhaps you can help them find part-time jobs, work-study programs, and even financial aid.
The reality of college costs is a big concern for most parents today. But that doesn't mean you sacrifice your future financially. As you save for your child's college education, remember to prioritize your retirement.