How To Save For A Child's Education

Saving for a child’s education is one of the most important financial goals parents have. Adults know one of the most important things they can give their child is the gift of a good education. A college degree allows children to go out into the world with a better resume, more options, and gives them the time they need to discover what they want to do for a living. A college education is not, however, an inexpensive purchase. Depending on where the child decides to go to school, the cost of tuition can reach into the tens of thousands of dollars for even just one semester. This is why parents must begin saving for college early. The following savings plans are designed to help parents do just that!

529 Plans

529 plans, which allows parents to pay for future higher education expenses by saving now, are great for parents who want to send their children to college and save a little money in the process. The account is a tax-advantaged investment which allows parents to save for their child’s education in any state, but it’s even more financially beneficial if the child chooses to go to school in their state of residence. Many states offer families a chance to save money for college in a 529 with certain tax advantages such as protection from creditors, non-taxable income status, and even matching grants for kids who have these savings accounts when they go into college. There’s a savings plan and a prepaid plan, but the prepaid 529 plan is only available in ten states. It allows families to lock in the current price of tuition for their child even if it goes up substantially. Savings based plans are grown using different investments over the years.

Continue reading to learn about Coverdell Education Savings Accounts.