As the month of September comes to a close and October creeps around the corner, your kids are starting to get settled into school and another year of planning for their futures begins to take way. Whether your child is beginning their first year of high school or still in their middle school years, it’s never too early to start thinking about looking into a college savings plan for them.
With the level of importance stressed on obtaining a college degree and the steady incline of tuition at Colleges and Universities across the country, ensuring that your child has a college savings plan is arguably one of the most important concepts to start thinking about as soon as possible. But then of course, the question becomes what type of plan do I get for my child?
A college savings plan is a perfect start-up plan for those looking to get their foot in the door and make some decisions. Most plans entail the completion of an initial application and are extremely easy to access. Better yet, some have the potential to be accepted at any University, and provided that the parents of the prospective students are the account owners, the funds are generally treated as belonging to them, not the child, which avoids potential problems with things like financial aid costs.
Perhaps one of the most appealing aspects of these plans is that they have the potential to cover a variety of costs that many worry they will not be able to attribute their funds to. Some of them include:
- Room and board costs
- Computers/technology expenses
- Books/school supplies
Another concern many parents have when creating a college savings plan is the question of affordability. Obviously, parents want to provide for their children and do their best to ensure that they can attend wherever they’d like post- high school. Yet, in the world we live in where inflation never stops and tuition costs continue to grow year-by-year, it can be difficult to identify which plan is the best fit for you.
Keeping in mind costs and expenses, the earnings of most college savings plans are completely free from federal income tax provided they are used for qualified expenses. To top it all off, majority are affordable plans to consider, sometimes starting at just $25.00 with the list of available contributors spanning to all family members.
Thinking about the future is hard, especially for those of us juggling two full-time jobs of being both a parent and an employee. Still, planning for college can be such a vital component to the level of education your child is able to receive, so don’t shy away from considering various savings plans.
For more information on college savings plans or general questions, feel free to check out our website or set up an appointment with one of our financial advisors.