Get started on your savings!

Most people can agree, college is an exciting and scary time for young adults and their parents. Not only is it a new chapter, but it’s also a time where finances are significant. The challenge is knowing how and when to start saving. What’s the right age, how much should you save, and which savings plans are the best? Doing research years in advance is vital to ensure that you’re ready. Check out these tips on how you can get your college savings plan on track: 

1. Start very early!

The best time to start saving for college is NOW! Even if you have other financial obligations that you need to save for, starting now is vital. You don’t need to pump an insane amount of money right away, but every bit will help. You can visit this simple College Savings Calculator to plug in your personal information and create a meaningful savings plan, no matter what age you or your children are. 

2. Set expectations

Setting expectations is good because it gives you a goal and a realistic idea of how much you will need. The average annual in-state college tuition in Florida was $14,000 for the 2019-2020 academic year. On top of that, you will need money for rent, food, books, and much more. The cost of college is expected to grow with inflation. But remember, you don’t have to accumulate all of this cash on your own. 

3. Choose a monthly contribution you can handle

Everyone’s plan will be different according to what they can afford. You want to do the most for your children and make a real contribution, but don’t overextend your budget to do so. You should avoid borrowing money that you can’t payback. A high-interest loan or second mortgage may seem like acceptable options to free up additional funds, but they may put you at tremendous financial risk. 

4. Research different savings plans and select the right one for you

Options like 529 Plans are a popular way for parents to save for their children’s college expenses. Several investment options will help contributions grow over time, and withdrawals are tax-free. With these types of plans, starting early is crucial. Another popular option is a Coverdell Education Savings Account. They are similar to 529s with one main difference: They let you invest in any stock, bond, or mutual fund. Regardless of how your family chooses to prepare for college, start early so you aren’t stressed when the time approaches. I promise it will come faster than you think! For more information, visit https://www.balancepro.org/resources/newsletters/four-tips-that-will-kickstart-your-college-savings-plan/