With graduation in full swing on campuses across the country, now is the perfect time to start thinking about how to pay for all of that education. The rising cost of tuition has left many parents and students with no option but to take out student loans, accruing a large amount of debt in the process. While student loans are an unavoidable reality for most of us, there are many things parents and students can do to minimize financial burdens after receiving that diploma.
Saving for College for Parents
As a parent, you likely understand the importance of saving for your child’s college education as soon as possible. Saving for college should become part of your financial planning when your child is born, if not earlier. Below are two ways you can begin saving for your child’s college tuition courtesy of Focus Financial’s team of financial advisors:
529 College Plans: These plans allow parents to save tax-free through a wide variety of investment packages. Many of these packages target more aggressive investments while the child is young for maximum return, then transition to more less-aggressive options as they near college.
Prepaid Tuition Plans: An easy way to get a jump start on tuition cost, prepaid tuition plans allow parents to purchase college credits for their child’s tuition at a predetermined price. Note: These plans generally only apply at in-state public universities.
Saving for College for Students
Living frugally is part of the college experience but as a student, there are always more ways to save money. While you may not have much experience in financial management at this stage in life, paying as much as your tuition off no will set you up for future financial success. Below you’ll find some tips to help save money during your college years:
- Only buy used textbooks and search for discounts online
- Use a bike or public transportation instead of a car
- Brew your own coffee instead of purchasing fancy lattes every morning
- Don’t sign up for credit cards you don’t need and keep your limit and interest rates low on the ones you do have
- Always be aware of your loans and the amount of debt you have
Whether you’re a parent preparing for your child’s education or a student nearing graduation, Focus Financial’s independent financial advisors can help you prepare for the future. With expert asset management and financial planning services, we will work with you to put together a personalized college savings plan that will set you on a path towards achieving your goals.
Take a moment to find a financial advisor near you and let’s get started!
Important Disclosure Notice: A 529 plan is a college savings plan that allows individuals to save for college on a tax-advantaged basis. Every state offers at least one 529 plan. Before buying a 529 plan, you should inquire about the particular plan and its fees and expenses. You should also consider that certain states offer tax benefits and fee savings to in-state residents. Whether a state tax deduction and/or application fee savings are available depends on your state of residence. For tax advice, consult your tax professional. Non-qualifying distribution earnings are taxable and subject to a 10% tax penalty.