Do You Have Enough Saved?
The cost associated with attending college continues to climb.
This year, college graduates left their institutions with an average of $35,051 in student debt, according to a recent CNBC article. The costs associated with higher education can be overwhelming, but smart saving strategies can help lessen the blow.
In this post, I’ll offer a few tips to get your college savings plan on the right track. If you live in Indiana, there are some special tax benefits for doing so, too!
Fewer Parents Saving for College
Recent statistics from a study conducted by Sallie Mae and Ipsos Public Affairs reveal that only 48% of parents with children 18 and under are saving for college this year, a decline from last year’s study. Families actively saving for college had saved an average of $10,040, which is a 25% drop from 2014.
While fewer parents are saving for college, it doesn’t mean you should follow their lead. In fact, quite the opposite is true.
Savings Make a Difference
Teach your kids the importance of savings early and often. Talk about setting aside a percentage of money from summer jobs and birthday gifts for the future. Explain how having money saved for college can ease the burden associated with college costs.
You may want to consider starting a savings account through the Indiana CollegeChoice 529 savings plan. This program is designed to help families save for college and provides tax benefits.
Set expectations and be clear with your children about how much or how little you are willing and able to contribute to their college educations. Encourage them to perform to the best of their abilities academically and to apply for scholarships to alleviate college costs. In the state of Indiana, there are hundreds or perhaps even thousands of scholarship opportunities from private organizations – not to mention those offered by public and private universities and colleges.
Federal student loans have limits, so your student may not be able to borrow enough to cover the costs of college alone. You may be able to apply for a Parent PLUS loan to cover those costs. Private student loans may require a cosigner.
Many costs associated with colleges such as accommodation, supplies, and reading materials can be significantly reduced. Student accommodation provided off-campus can often be much cheaper than those provided by the college. In addition, graduation regalia does not have to be bought from the college directly, you can use sites like https://www.jostens.com/graduation/college/ or find a local rental company. Finally, buying or renting used books and supplies is always significantly cheaper than buying brand new from the college.
Strategies like this can help reduce the burden of debt on your children whilst making minimal sacrifices to the quality of their education and student life.
Talk About College Savings
Saving for college doesn’t have to be a hassle. If you need help setting up a plan or understanding the world of student loans, contact the experts at Baker Retirement & Wealth Management, PC. We help individuals understand how to save and pay for education. Our team has been providing financial advice in the greater Evansville area for close to thirty years. Stop by our office in Newburgh, Evansville, Owensville, or Boonville or give us a call toll free at 1-866-244-3517.Talk to a CPA for Free
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