The value of an advanced degree can make a huge difference in earning potential over the course of a career. It can also bring thousands of dollars of student loan debt that can drag on for years. Proactively planning for your child’s education is important, and building a sound financial plan can help your family escape this debt trap. And, the earlier you start, the better.
Sometimes building your child’s college fund is easier said than done, especially due to your own financial obligations. There are still things you can do to help offset the costs, even if you cannot eliminate them entirely. Consider the following:
Open a 529 Plan—These plans allow you to save after-tax money into an investment account, then withdraw it tax-free to pay for qualified education expenses. You own the account as a parent, so if your child chooses to pursue other interests than college, you can change the beneficiary and help another family member with their education.
Open a Savings Account—While they do not have the growth potential of some other investments, savings accounts are the easiest way to store your money. You can then have automatic salary deductions directed to the account to make saving easier. The advantage is the money is easy to access without penalties. For that reason, it requires more discipline.
Invest in Treasury Bonds—Yes, the good old savings bond is still around. They are backed by the government and are low-risk, slow-growth investments. Essentially, you are loaning the government money and getting paid back with interest when you cash them out. Because of their low return, savings bonds are not attractive as a primary way to cover college costs, but are a good secondary tactic to consider as a way to cover some qualified expenses.
These are just a few things you can start doing now to help save for college. Kinecta Wealth Management can help you learn about these and more that might fit your specific situation. We specialize in building diversified portfolios and can help you find your best recipe to work toward financial independence. We will listen to your story and help you create a tailored investment plan based on your goals and your tolerance for risk. We will also stay with you as your investments mature, explaining changes, offering adjustments, and refreshing your plan as situations and circumstances of your life change. Come in and let’s start a conversation about building your personal success story.