Majority of students have college student loan. After graduation, student are owed by private and federal loans.Even if the loans are useful, also they are a big burden.However, your kid does not have to study on college student loan.It is advisable that you begin preparing early in advance for the college education of your child. Saving what you can will greatly reduce the burden that comes with student loan. This guide offers you ways to save for your child’s higher education.
You need to keep in mind that each penny means a lot. If you want to have bigger savings, you need to start saving early. Create a budget you can stick to for you to grow your savings.You can opt to cut back on expenses such as transportation, entertainment and utility costs. The first savings may be small but with time they will grow.
Consider the benefits of Roth IRA.Roth IRS also covers college costs regardless of it being an individual retirement account. The money grow free of taxes.The money can be used for various investment options such as stocks and bonds. Roth IRS withdrawals are penalty free.
You can choose to open an education savings account.It is preferable than a regular savings account provided you can save more than $2,000.The savings plan is tax free.Making withdrawals that are related to education expenses is tax free.You can also choose several investment options.Growing your money is flexible.
Also, you can choose to have a 529 education saving plan. It is an alternative if you are not qualified for an education savings account. 529 plan offers the choice of withdrawing against different college costs. It also covers board and room and not tuition alone.You can withdraw the money and use it across all universities and colleges.529 plan gives you the option of changing the named beneficiary.
An education trust fund is great for your kid.The child is the beneficiary and a trustee a different person. The trustee is the one who will make sure that your funds go towards the education of your child. Your kid needs to show the bills to the trustee.
Another way is to become a rental property owner.You can still work and make money on the side. Choose your tenants well for a long term relationship.
In addition, you need to master the art and science of house hacking. House hacking means that having others pay for part or all of your housing costs. You can choose to rent out a section of your property if you cannot afford to buy rental properties.
Cite: wikipedia reference