It can be a statement that is pointing out the obvious, but raising children costs money; it can be expensive. And the cost starts before they are even born with the things that they will need such as stroller, car seat, and crib. Then when you think about later years such as college, the cost can be pretty staggering. The good news is that you have options to start saving for your child’s future today, no matter what the amount of spare cash, or the budget that you are working to is.
Whether you are planning to save for them to go to college or to further their education with something like a BS healthcare administration online, or just for things like school clothes or school trips, it all adds up. The good news is that you can make your money do more for you. Here are some tips to help.
College Savings Plan
If college is a plan for your child, or you at least want that option, the looking for a specific college savings plan can be a good idea. It lets you put money into the account over time, and then when you need to use it for college specific items, you can take that money out and use it at US colleges. The good news is the cash from these accounts can be withdrawn tax-free. There are no restrictions on the amount you can put in or how much you have to be earning to open an account. So it is just a good tax-free way to save for your child to afford to go to college.
Prepaid Tuition Plan
If you want to save money for your child but don’t want to have the risk of investing your cash to be able to afford it, then a prepaid tuition plan could be just what you need. With a plan like this, it allows you to pay for tuition at the rate of today, so you can lock in that price. This can be tricky, though, depending on where your child goes to school. If they pick an out of state school you will have to meet the difference yourselves, and not all states are going to offer the plans. So shop around and check it all first.
You can’t forget the old faithful of a savings account. While the interest rates are pretty low, and any interest is taxed as income, then having a savings account can be a pretty safe way of saving your money for your child’s future; whatever that looks like. Not all savings accounts are created equal, though, so it is a good idea to shop around and find the best rate. Then you will be earning more simply by just having the money sat there in your account.
There is no time like the present to make a plan and get saving. So what are you waiting for? If you’re into things like stocks and shares, then you could be making some specific for your children and their needs in the future.