Although nearly all parents believe that college is an investment in their children’s future, they don’t always have a plan to pay for it. Planning ahead of time reduces stress and helps students know what their options are. If you have money saved, it saves on student loans and possibly tuition costs later on. Take a look at ways that parents can plan ahead.
Open a 529 College Savings Account
You can open a 529 college savings account to save for college. It gives you tax-deferred earnings, and you get tax-free distributions on the expenses associated with education. This is a great way for parents to save and invest in their children’s college years. You can start with a small amount of money because anything you save will be there when the time comes.
Create a Budget
When you plan for college, you can create a budget so that you know what you will need. Planning allows you to borrow less money and spend more on college so that there is less of a burden when the time comes. You can factor in the college tuition as a current expense, and make a contribution to the 529 College Savings Account monthly starting as early as you can.
Encourage Your Child to Develop Talent
If your child is passionate about any talents they have, encourage them to develop them. Doing any extracurricular activities, including sports, dance, or music, are beneficial to your child during childhood and can open the door for potential scholarships later on. Rather than trying to expose your child to many different activities, let them choose what they love and pursue it.
Understand Financial Aid Ahead of Time
When you understand how financial aid works, you will be better prepared. There are many different types of aid, including federal grants, state grants, student loans, scholarships, and more. Make sure that you learn about these opportunities before you start the process. Some have requirements that need to be met during high school, and you should do what you can to help your child have as many opportunities as possible.