“It is not necessary to do extraordinary things to get extraordinary results.” – Warren Buffett
Here’s a true statement: Kids are expensive. One day they are going off to preschool and then before ya know it the little meatballs are on their way to college. My questions is, what is your savings plan for your child’s higher education? Is the responsibility on them to pay? Are you planning on helping them out with some of their college expenses? Or is it a hope scholarships will pay for their schooling? No matter what route you take you need to have a plan. That’s where I come in. In today’s blog I’m going to discuss some ways you can start saving for your child’s college education today:
529 Plan – The 529 College savings plan is a plan that allows you to automatically make contributions into an account specifically for your child’s education. Think of it like an IRA or retirement account, but for your child’s education. There are several tax advantages to 529 Plans such as being able to deduct contributions off your state income taxes as well. You can also choose various stock and bond options as a way to help your contributions grow; which in twenty or so years could add up by the time your child is ready for college, or another venture. So how do you get involved with signing up for a 529 Plan? Several brokerages offer them, my best advice would be to Google 529 College Savings Plan in your state and start doing a little research on the best ones. Keep in mind college savings plan vary state to state, as the tax rules are different; a great way to get educated quickly on a 529 College Saving plan is to talk to your CPA or Tax official!
Utilize The Gig Economy – Growing up I was fortunate enough for my mother to be a stay at home mom throughout most of my childhood. However for most parents today that isn’t exactly an option. In many areas the cost of living requires a two income figure to meet expenses. Yet I feel there is a way around this, by utilizing the gig economy. My parents introduced me to this concept back in the 90’s where my father would work a full time job, and even though my mom was a stay at home mom, she would baby sit and do other odd jobs on the side. It was those odd jobs that helped pay for my college education. Today’s gig economy makes it so easy to be able to make income through offering services; from tutoring apps to selling arts and crafts online, and many other ventures. What is wonderful about these options is that it allows you to carve out your day and accommodate your children yet stash away money from those side gigs into a college fund. Need a list of possible gig economy options? Check out our blog on the Gig Economy where we provide links to several sites you might find helpful!
Low Cost Exchange Traded Funds – For those of you who don’t know, my investment of choice (aside from Real Estate) are low Exchange Traded Funds (ETFs). So what are ETF’s? ETF’s are a collection of stocks and bonds (kind of like a mutual fund). What is cool about ETF’s is that you can invest in higher end companies without paying a huge price for their stock. For instance Amazon is currently trading at $1,305.20. However I just bought an ETF for $70.00 which has 20% allocation in Amazon. See what I’m getting at? ETF’s also allow you to invest in specific industries. So say down the line you have a really good hunch that the Robotics industry is going to take off; you can invest in an ETF that specifically allocates stocks from Robotic’s companies. So how does this relate back to saving for your child’s college education? Well ETF’s are built for growth. Of course the growth percentage depends on the fund; but there are quite a bit of ETF’s that yield amazing dividends and growth in the long term, something that is needed when saving for your child’s college. To learn more about ETF’s do a little research on Google, other investment sites and blogs (check out our resources page), or ask us!
Conclusion – Saving for your child’s education is no easy task. However hopefully with some of the resources provided you can start today to stash a little money away for them before they they start the next phase of their life. Do you have any questions, thoughts, or comments on anything shared in today’s blog? Have you found a better or easier way to save for your child’s education? Let us know in the comments below, as always we love to hear from you!