Shop for Your Child's Future With a College Savings Plan
There’s no way around it; college is expensive. Often the more specific your child’s career goals, the fewer options they’ll have for comparing different colleges and costs. This makes a personal savings plan even more of a necessity. Below, we’ve outlined some ways to make sure that when it comes to your child’s higher education the only thing you’ll need to worry about is not tearing up when you drop them off at their dorm room.
Estimate the Cost of Your Savings Goal
Start by estimating the total cost your child's needs to save for college by using our student loan savings account calculator. This amount may fluctuate based on things like scholarships and financial aid awards your child may be eligible to receive, however the ballpark amount can be used to keep from being taken by surprise down the road when the time comes for your child to cash in on their college savings.
Remember that a college savings plan is meant to be treated like a running start and not necessarily supposed to carry you to the finish line. It’s rare that parents are able to save the total amount of their child’s projected college cost by their high school graduation, but the numbers are more manageable the more you can break them down.
Starting Your College Savings Account
Once you’ve determined the total projected cost break this number down by year leading up to your child’s high school graduation, and then by month, and then by paycheck to give yourself an idea of what impact this percentage will have on your personal finances if you were to save the entire amount. Only in very rare circumstances are parents able to save this amount in full, but don’t feel overwhelmed – many alternate financing options are available such as student loans, and you’ll at least be able to alleviate the burden by setting aside as much as you can in the meantime.
How to Save for College
Once you’ve determined the total amount you can afford to set aside per paycheck, look for other ways to add money to the account. You can put the money you would have spent into the savings account, and these seemingly small contributions will add up. Below are a few ideas to get you thinking in the right direction:
- Make relatives aware of your savings plans so when birthdays and holidays roll around they’ll consider making a contribution as a gift.
- Encourage your child to get part-time jobs in the summertime and put a percentage of their earnings towards their college goals (which is also a fantastic way to teach them about savings).
- Replace simple luxuries with cost effective alternatives such as cooking at home instead of going out to eat or taking annual vacations in places that are closer to home and known for being less expensive.
As with any savings accounts, we recommend speaking with your banker on the phone or in person to ensure that you are making the most of your savings options. Call us today at 1-800-922-9999 and speak with a Citizens Bank representative to decide which options are best for you.