Majority of students have college student loan. After graduation, student are owed by private and federal loans.Despite the usefulness of the loans, they can be 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. You should save what you can to reduce the burden of student loan. Read on to get tips of how you can 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.Figuring out your expenses will help you know where to cut back on such as medication, utility, entertainment and transportation. The initial savings may be small but eventually they will add up.
Consider the benefits of Roth IRA.Roth IRS also covers college costs regardless of it being an individual retirement account. The money is usually tax free.You can use the money to invest in stocks and bonds. The good thing about Roth IRA is that withdrawals for contributions are penalty free.
Consider opening an education savings account.For those who can afford to save more than $2,000, it is ideal compared to a regular savings account.The plan is free of tax.Making withdrawals that are related to education expenses is tax free.Also, you are free to pick different investment options.There is flexibility when it comes to growing your money.
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. You can use 529 plan to withdraw for different college costs. It covers room and board apart from tuition.The money can be withdrawn and used across different colleges and universities.This plan offers the option of changing the beneficiary’ name.
You can have an educational trust fund for your kid.The child is the beneficiary and a trustee a different person. The trustee is the one who ensures the funds cater to your child’s education. Your kid needs to show the bills to the trustee.
Being a rental property owner is a great way to save because it is a passive income generator.You can still work and make money on the side. Provided you choose your tenants wisely, you will build a long term relationship.
In addition, master the art of house hacking to save money for the entire family. House hacking means that having others pay for part or all of your housing costs. You can start with the property you have if you don’t have cash to buy rental properties.