Did you know the average cost to secure a solid jump start in your sweet baby’s future at a public 4-year college is roughly $20,000 per year? The yearly cost quickly totals about $100,000 or more in guaranteed future expenses.
Kids are expensive, yes! But they are also single-handedly the best investment towards your legacy.
Therefore, saving for their future is as important as saving for retirement, emergencies, and the unexpected. Additionally, as with any savings plan, investing in their futures should begin with a well-thought-out plan.
Beginning with a plan almost always ensures you’re one step closer to the financial security we all desire, regardless of the unexpected. Saving for your child’s college future can be done in 3 steps!
Step 1: Lay the financial roadmap to their success.
Whether or not your child chooses to pursue higher education, having money set aside for their future helps set them up for financial success after high school.
Begin your savings roadmap by surveying local colleges, universities, and trade schools for estimated costs. You’ll want to gather the price of admission, enrollment, housing, and any other additional fees that may come along.
Remember, these costs may increase or decrease as your child reaches graduation. Review these costs annually to make the necessary adjustments in the contributions towards their future.
Step 2: Figure out the best time to start saving.
When is the best time to start saving for your child’s future? Well, the sooner you start, the better.
Whether the child is 0, 5, 8, or 15, the best time to start saving for their future is now. After all, beginning now instead of a year from now means you’ll have that much more to set aside for their success.
Even if you’re only saving a couple of dollars here and there in their youth savings account, you’ll be doing yourself and your child a favor in the future.
Now that you’ve created a plan and have the funds to begin saving, it’s time to start shopping around for the best return on your investment.
Step 3: Get the most bang for your buck!
Shop around to determine the current rates and benefits of savings accounts before deciding where you will save money for your child’s future.
Visit the websites of local institutions, like Pelican, or visit local branches to discuss with a representative.
No matter how you research, remember to consider every additional dollar that can come in. Consider this will allow you to make the best-informed decision. Put your money to work for you by letting it earn more in an interest-bearing account!
When evaluating your options, consider asking about Share Certificates, traditional savings accounts, and more with your local financial institutions. Be sure to make note of the risks, like early withdrawal penalties and maintenance fees.
Fortunately for Louisiana residents, they can take advantage of the START savings program. The program is a recognized 529 plan earmarked for college savings under the IRS tax code.
This program also provides a matching amount from 2% to 14% of the total savings based on income. To learn more about START, visit their website: Louisiana’s Student Tuition Assistance & Revenue Trust (la.gov)
Have you started preparing for your little one’s future? Let us know how in the comments below!
Once a Pelican State CU member, always a member—through life’s milestones, we’ll always be there to help you with your financial needs. Your Financial Family for Life. Give us a call at 800-351-4877.