College education is critical for your children. It will teach them a profession and will open up many doors for them as well. Also, their college education will also help them build a good network for when they graduate. With the college education, your children will have better job options and will get to enjoy more opportunities. Unfortunately, a college education can be pretty expensive, and if you want to give them quality education, then you have to prepare for it, tighten your belt some more. Below are some tips for saving money for their college education.
Learn More About the 529 College Savings Plans
A very popular method when it comes to saving for your children’s college education is to save through the 529 College Saving Plans. This college education plan works very similarly to that of the IRA or Individual Retirement Account where you will be given a variety of investment choices, depending upon your family income. In fact, you can even open an account with as small as $25 as initial payment.
Your child can enroll himself in an accredited college or university using the money you poured into his 529 college savings plan. You can even cash it out and send him to another school. Of note; you will have to pay a penalty if you decide to go this route. If the recipient of this plan has no plans to go to college, then you can have the plan transferred to another family member.
Learn More About Prepaid Tuition Plans
Another way that you can save for your child’s college education is to get them a prepaid tuition plan. You can pay for their college education now, at today’s prices, even though they will not be using it for another 15 years. You can even opt to prepay just a portion of the college education if money is a problem.
Prepaid tuition plans are typically given by the public universities and colleges in your home state and are only given to those who are living in that state. If your child chooses to study in another state, you can still use the money, but you have to make up any difference in the college education costs.
Know If Your Child Has the Right Insurance Coverage
You will be able to save a lot of money if you get your child the proper insurance coverage when they go to college. This is especially true if they are going to study in another state and going to drive a car there.
According to an insurance company based in Nebraska and Iowa, this is one of the things that many parents fail to take into consideration before their children go to college. They think that their child’s regular insurance plan will cover everything they will need in college but find out too late that it does not. If your child is going to drive a car at university, for example, and the car is registered under your name, then you have to make sure that it is listed in your policy as well. If not, then you have to call your auto insurance provider and have them write the coverage for your child’s college’s state as well as location.
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Take a look at this Dave Ramsey Infographic illustrating the Special College IRA savings account.
- License: Creative Commons image source
Jennifer D’Adamo is an article writer for parenting blogs. She specializes in money-saving tips for the family.