• Home
  • News
    • Local News
    • National
    • Comm Briefs
  • Editorials
  • Health
  • Entertainment
  • Sports
  • Technology/Business
  • Autos
Search
The Seattle MediumPulses PRO
Sign in
Welcome! Log into your account
Forgot your password? Get help
Password recovery
Recover your password
A password will be e-mailed to you.
  • Terms and Conditions
Sign in / Join
57.1 F
Portland
The Seattle MediumPulses PRO
Sunday, October 1, 2023
Facebook
Instagram
Twitter
Youtube
type here...
  • Home
  • News
    • Local News
    • National
    • Comm Briefs
  • Editorials
  • Health
  • Entertainment
  • Sports
  • Technology/Business
  • Autos
Home Finances FYI The Key To Saving For College: Start Now
  • Finances FYI

The Key To Saving For College: Start Now

July 26, 2021
Facebook
Twitter
WhatsApp
Email

    Finances FYI Presented by JPMorgan Chase

    Have you ever heard the old saying, “You can’t start saving for your kids’ college education too early”? Unlike a lot of old sayings, this one is absolutely true.

    As soon as you bring that little bundle of joy home from the hospital, you should be thinking about how to save the bundle they may need about 18 years later.

    College can be a crushing expense for students and their families – especially at four-year schools.

    In the 2018-19 academic year, annual tuition, fees, room, and board at four-year universities and colleges in the U.S. averaged $21,370 at public schools for in-state students, $37,430 at public institutions for out-of-state students, and $48,510 at private nonprofit colleges, according to a report from the College Board. There are dozens of schools nationwide where a student is on the hook for more than $75,000 a year.

    And you can expect those costs to grow as your child gets closer to college age. Average four-year college expenses have doubled since 2002, a much faster rate of increase than the cost of living, federal figures show. A child born today may see college costs two or three times higher by the time they enroll.

    So, parents should get started saving early – the earlier, the better. Some parents even start saving before their child is born. But how to start? Here are some tips.

    Set a target amount.

    Determine the fundyou want to have by the time your child is ready for college. It may be unrealistic to save enough to cover all college costs, so consider a target of half or a third of what you expect the total tab to be. The rest can be paid in real-time by the student and/or parents and relatives, and student loans or scholarships may come into play. Bottom line: Any money saved is better than no money saved.

    Establish a separate college fund.

    It’ll be easier for you to keep your hands off the money if it’s not mixed in with another account.

    Decide on an amount you can afford to set aside on a regular basis.

    If you’re young and you expect your income to rise over time, you might want to save modestly now and increase what you set aside each time you get a raise. But start now and get in the habit of saving; you may find you can live without the money more easily than you thought.

    Decide on how frequently you’ll transfer money to the college account, and stick with it.

    You might time your transfers to how often you get paid: monthly, twice a month, or whatever works best for you. Frequent, smaller transfers might be easier for you to handle than larger, less-frequent deposits.

    Set up an automatic transfer from your bank account to the college fund.

    Don’t trust yourself to make the transfers manually – you might “forget,” deliberately or otherwise.

    Decide how much investment risk you can tolerate.

    A traditional bank savings account will spare you any risk, but your contributed money will earn less than the inflation rate. On the other hand, investing heavily in stocks could boost your earnings but also expose your account to losses. Consider a mix of investments at first and then scale back on stocks as college age approaches.

    Look into a 529 education savings plan. 

    Money in a 529 plan can be spent tax-free on a variety of qualifying education expenses (otherwise, you’ll pay tax and possibly a 10% penalty). Also, many states offer a break on state income tax for contributions to certain 529 plans; check with your state for details. Caution: The features of 529 plans vary widely, so make sure you understand the fees, investment choices, and tax-break eligibility.

    Many families may also want to consider a prepaid tuition plan – often a special form of a 529 plan. These plans generally let you lock in future tuition at today’s prices. But only a handful of states offer them for their public colleges, and your child generally must attend an in-state school. There is a separate national plan that covers some 300 private universities. Again, make sure you understand the costs, rules, and risks – and what happens if your child attends a non-participating college.

    Consider buying a U.S. savings bond.

    Buying U.S. Savings Bonds is a time-honored, low-risk way to save for college, and you may get tax benefits if you cash out Series EE or Series I bonds to pay for education costs.

    You might also be able to use other kinds of accounts to save for college, including a Coverdell education savings account (although contributions are limited to $2,000 a year) or a Roth IRA. Some of these tools may impact your child’s future eligibility for financial aid, so consult a

    Finances FYI is presented by JPMorgan Chase. JPMorgan Chase is making a $30 billion commitment over the next five years to address some of the largest drivers of the racial wealth divide.

    Facebook
    Twitter
    WhatsApp
    Email
      Previous articleMother Holds Vaccination Drive At Memorial For Her 46-Year-Old Son Who Died Of Covid-19
      Next articleSimone Biles Withdraws From Women’s Team Gymnastics At Tokyo 2020 Olympics
      The Portland Medium

      RELATED ARTICLESMORE FROM AUTHOR

      We Need to Talk About Preschool Suspensions

      AFT Leader Fedrick Ingram Talks Teaching Truth In Schools

      With Fewer School Counselors, Black Kids Pay The Emotional Price

      Must Read

      Supreme Court Will Look At New State Laws That Attempt To...

      The Supreme Court will leap into online moderation debate for the second year running after the justices on Friday agreed to decide whether states can essentially control how social media companies operate.

      Why Are Students Not On Grade Level Being Promoted Anyway?

      Will Biden’s New Gun Prevention Office Help Black America?

      EDITOR PICKS

      Black Students With Disabilities Deserve Better School Experiences

      ‘The Job Isn’t Done’: More Black Americans Need Health Insurance Coverage

      New York Fund Apologizes For Role In Tuskegee Syphilis Study

      POPULAR POSTS

      Tigard Man Threatened Mass Shooting At Elementary School

      Stacey Abrams: ‘Nothing Sacrosanct’ About Nine SCOTUS Justices

      Black Women Will Suffer The Harshest Consequences After The Overturn Of...

      POPULAR CATEGORY

      • Featured News1167
      • Video956
      • Health649
      • Local News602
      • National504
      • National News435
      • Lifestyle434
      • Editorials369
      • Sports339
      The Seattle Medium
      ABOUT US
      FOLLOW US
      • Terms and Conditions
      ©
      MORE STORIES

      Supreme Court Will Look At New State Laws That Attempt To...

      Why Are Students Not On Grade Level Being Promoted Anyway?

      × Hide