How can I save money for my child’s college education if I am just self employed, a single mom from Nebraska asked a question. When it comes to the preparation of our children’s future, we are willing to do anything just to give them a brighter tomorrow. We believe “education is the key to success”. We want to raise our kids with good education and with good moral character.
The education of our children is the foundation of their future. We want them to become professionals in a specific field like medicine doctors, architects, engineers, pilots or even a business owners someday.
The fact that education are becoming more expensive today due to increasing of the tuition fees annually, the more you should prepare enough money to send them in a prestigious university like Harvard or Stanford University and take the course they really wanted.
But the question pop in your mind and think how much money to save for your kids when they enter college. This article may not help you to calculate the exact amount but it can give you ideas and the best ways to save money for your child education.
How to Save Money for Child Education
Saving money for child’s college is very easy. you just to take action and know everything. You will surely know much should you save for kids college by searching the tuition fees increasing rate of the university wherein you want to send your child. Example, if you want to send your kids in University ABC that has tuition fees increasing rate of 3% per year, you must save money that allows you to earn more than 3% per year.
That’s why, InvestmentTotal.com suggest you to invest money as early as you can while your children are still young. We want to give you an idea on how not just to save but to invest money for your kids education.
I hope you know the reasons why it is important to save money for your child education. If you don’t know the reasons, here are they;
- Because you want your child to have a college degree
- Because you want your kids to get a good job and a better career.
- Because you want your child to understand easily how does “owning a business works”.
- Because you want them to have a better future.
There’s no sense to continue reading this article if you are selfish as a parent and don’t want to give your child a better future.
1. Open a “In Trust for Account” for Your Child
What is meant by ITF or in-trust-for account? It is an investment or savings account wherein you and your kids are allowed to touch the funds. Your kids has the right to get the funds just when you are not present. The best in-trust-for investment account is mutual funds and stock brokerage account.
Since your kids are still young, you can maximize the growth of your savings by investing them in stocks or mutual funds. In our example, we should invest our money that earns at least higher than 3%. As a rule of thumb, invest your money that earns 3% to 5% higher than inflation rate. If inflation rate is 4%, make sure your investments are earning 7% per year.
2. Take Advantage of Education Plans
Parents are willing to spend money for their kid’s education. They are looking for the best insurance companies who offers education plan. How does it work? You can buy educational plans. You will pay the company every month or every year. The company agreed that when your child enter college, it will help your child to pay for his tuition fees or to give your child a large amount of money to use for his education.
3. Teach Your Kids About Finances
You better teach your kids about managing money. Try to give them personal finance books. Who knows when they know how to save, they might be the one to save money for their own education without getting any student loan.
There are many ways to teach your kids about managing finances, one of them is to buy them a piggy bank, reward them whenever they make some good deeds or when they perform well in school. Some parents open a savings account for their kids while at their young age. They want their kids to have the habit of saving money.
In order for you to prepare your finances to support your child’s education, you must open a in-trust-for savings or investment account like stock brokerage account or mutual fund account. You can buy educational plans, make sure you investigate the company.
Teaching your kids about finances can help them understand the wonder of saving and investing early. You better ask a certified financial planner before you make a certain action to avoid financial mistakes and financial losses. A CFP can help you to analyze how much money to save for your child education.
Thought of the Day:
If education is expensive, try ignorance. – Derek Bok
What can you say about this article? Does it make sense? Feel free to add your opinion on how can we really save money for our children’s education. Thank you and God bless.