Saving For College
I don't have any money to save.
Some families are living paycheck to paycheck and do not have any money to save toward future college expenses. But in other cases, families can find money to save just by reviewing their expenses, their lifestyle, and their priorities. For example, a two-pack-a-day smoker could save around $100 a month by cutting down to one pack a day. Money can be saved by canceling subscriptions to magazines that you never get around to reading. If you brown-bag it instead of eating out for lunch a few days a week, you can find an extra $50 each month. Add it up, and all of a sudden you have the means to start a college fund. You just need to make saving a priority and come up with a plan.
I don't know where to invest money to save for college.
There are more college savings options now than ever before. Traditional savings accounts through banks and credit unions are easy to set up and manage. Money market accounts and mutual funds can be arranged through financial service providers. Recent changes to the tax laws have provided families with even more opportunities to save; Education IRAs, 529 Plans, and Custodial Accounts are three of the most popular ways in which parents can now save money for their children's college education. And now you can even save for college when you shop. Through the Upromise program, when you shop at hundreds of grocery stores, drug stores, retailers, and other participating companies, they rebate a portion of your purchase price back into your college saving account. So as you can see, there are many options available to you when it comes to saving money for college. To determine the best way for you to save, consult your local lender, tax advisor, or financial service provider.
My child will get scholarships, so I don't need to save for college.
Hopefully, your child will receive many scholarship offers to attend college. But the reality is that seldom will those scholarships cover the entire cost. Even a full tuition scholarship will still leave the student with expenses such as room and board, books and supplies, transportation, and personal needs. Federal and state financial aid programs can help, but often there is still a gap that must be met. These remaining expenses will have to be covered by the family, and without savings, the family will likely turn to loans.
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"An investment in knowledge always pays the best interest. ~Benjamin Franklin"
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