A financial advisor is the quarterback of your professional team when it comes to saving for your child’s education. Sending a child off to college can be one of the happiest and satisfying days in a parent’s life. The joy of planning for college can also be met by stress if the family is not financially prepared for such an investment. Many families want to save, but some just do not know how. This leads to procrastination and often a shortfall when it comes time for their child to go to college. It is a responsible idea to begin saving for your child’s education as soon as possible.
Tips for saving
Save sooner rather than later, inflation causes the cost of colleges to rise each year. According to finaid.org, college tuition increases by 8% per year, which means the cost of college doubles every 9 years.
Consider investing the gifts your child receives at birth in savings bonds or 529 plans in order to save for college, these investments will reduce your taxes. **
Create a Budget:
Determine the whole cost of your child’s education including books, room and board, and transportation. This will allow you to determine how much money you will need to save.
Consult with a financial advisor in order to determine what financial tools are necessary to save the proper amount for your child’s education.
Being accepted into college is a very important milestone for a child and his or her parents. It is important to keep this day as joyful as possible instead of having it be a day filled with worry. The service a wealth manager can provide for a family when it comes to saving for college is almost invaluable and it will alleviate many of the stresses families face during this time.
**Prior to investing in a 529 plan, investors should consider whether the investor’s or designated beneficiary’s home state offers any state tax or other benefits that are only available for investments in such state’s qualified tuition program. Withdrawals used for qualified expenses are federally tax-free. Tax treatment at the state level may vary. Please consult with your tax advisor before investing.