If you’re the parent of young children, you should start to plan and save for their college education. With the cost of education rising, starting a college savings account sooner rather than later is one way to ensure that your kids will be able to meet the cost of their education.
Opening a 529 plan can help you save for future education costs now. These mostly state government-sponsored savings plans allow you to deduct your contributions from your state income tax in many cases, so when it comes time to withdraw the money, it won’t be taxed.
Putting money into savings bonds is another way to make sure your child has money to cover their education. Savings bonds are guaranteed by the government and come with almost no risk—but the tradeoff is that the interest you earn is lower than with many investments.
A Coverdell Education Savings Account is a trust account that’s tax-deferred to be used for education expenses, and that includes room and board. The interest earned is tax-free as long as the funds go to cover the cost of education.
Starting a Roth IRA, which is typically a retirement fund, can be a good way to save for schooling. Contributions are not tax-deductible, but the distributions can be tax-free. It’s smartest if you’re in the right income bracket, though, so consult a financial advisor or start by looking up more information online.
Preparing Your Child to Succeed
Your child’s day-to-day success at school starts with you. The supplies they have on hand will ensure they have what they need to get the grade.
Make sure their backpack is the right size to fit in their locker, while being big enough to carry all they need.
If your child has access to their own electronics, make sure to check their school’s policy about use during class time. Also, if the school provides electronic devices like laptops, make sure to understand who is responsible for their cost if they are broken.
Sending your child to school prepared to concentrate means making sure they have the brain power they need during the day. Make sure they have the right bag or box to carry a nutritional lunch or snack to keep them motivated during the day.
Feature image, Prostock-Studio/adobestock.com
This story originally appeared in our January issue. For more stories like this, subscribe to our monthly magazine.
