Personal Finance 101: Saving For College

Do you have children?

If so, would you like them to attend college?

As you well know, college is not getting any cheaper. It is important to try and save money now, while your kids are young, so that when the time comes for your babies to go off to school, you and your kids won’t have the extra burden of finances to worry about.

There are many ways to start a college fund. One of the best ways to build tax-advantaged savings for college is the 529 plan. A 529 plan is a tax-advantaged savings plan designed to encourage saving for future college costs.
There are two types of 529 plans:

Pre-paid tuition plans and college savings plans. The differences between pre-paid tuition plans and college savings plans, is that each individual family needs to determine which plan may be right for their needs.

Pre-paid tuition plans which generally allow college savers to purchase units or credits at participating colleges and universities for future tuition and, in some cases, room and board. Most prepaid tuition plans are sponsored by state governments and have residency requirements. Many state governments guarantee investments in pre-paid tuition plans that they sponsor. Most employers have a program where you allocate an amount to be set aside, before taxes are taken out, for the purpose of college tuition. This amount is taken out of your pay check before you even see it and like I said it is tax free! You will need to speak to the Human Resources department to find out more details and to set this up.

Also, you can check with your bank for college saving plans. The account can be set up and a portion of your pay check can be deposited into the savings account. This account can accrue interest. Your banking representative can go over all the details with you and chart a course of action.

College is a huge expense. Especially if you have many children. Proper planning will take the sting out of your wallet.

About The Author

Keroy King

Keroy King is a Financial Educator, Podcast Host, Keynote Speaker & Empowerment Expert, residing in Los Angeles, California and the Founder of "Life Then Finance" a community where she coaches individuals to overcome personal and financial obstacles that are holding them back so they can quickly and effectively live a full-filled and purpose driven life. Even when they think the odds are stacked against them. She is also an online course creator & instructor of several personal finance and personal transformation online courses.