April 8th, 2013
Make a College Savings Plan for Your Kids (or Yourself) on a Budget
**Today’s guest post is contributed by the editors of The Allstate Blog.**
Even if your child hasn’t yet learned to walk, it’s never too early to start saving and budgeting for his or her college education. In these tough economic times, when it comes to creating and adhering to a successful savings plan for college, you may need to work over the long term to save enough money. In order to get a substantial head start on the rising cost of tuition, it’s a good idea to have several eggs in your basket when you’re budgeting for college.
Start Small
According to the National Center for Education Statistics, undergraduate tuition for the 2010-11 school year was estimated to be $15,605 at four-year public institutions and $31,975 at four-year private schools, and these numbers have been on the rise since 1980. If this trend is any indication, you can probably expect the cost of a college education to continue to increase.
As a parent attempting to save for a child’s future education, these figures can be daunting. However, in order to get over the shock of the initial sticker price and set the groundwork for a successful college savings plan, you’re going to have to start small and put the big picture on the back burner. Your toddler is only in diapers, remember?
If you’re able to put $10 a week into a college savings account, it will amount to $9,360 over 18 years. An interest rate as small as 4 percent could also yield a heftier total of $13,875 over 18 years. If you’re able to set aside $20 a week, then you’ll have $18,720 at the end of 18 years.
529 College Savings Plans
Another option you may want to explore is the 529 College Savings Plan. Created in 1996, 529 College Savings Plans are operated by a state or educational institution and are specifically designed to help families save money for college. Whether you want to have a set sum of money directly deposited from your paycheck or make deposits on your own, the funds are invested and will earn interest similar to a 401(k).
One of the major benefits of 529 Savings Plans is that grandparents, friends and loved ones can all deposit money into these accounts. If your son or daughter has more toys than they know what to do with, you can encourage relatives to contribute to the college fund when birthdays roll around instead of adding to the clutter of colorful plastic.
Alternative Ways to Save
While saving money for college is likely your first priority, there are also ways to budget money once a child is enrolled at school. Money-saving tips for college students include buying used books instead of new ones, applying for work study programs, or even living at home instead of in a dorm, as this will help cut the cost of room and board.
When you’re establishing the groundwork for a successful college savings plan, it’s best not to get overwhelmed by the big picture. Starting early and working on a steady plan can help make saving for your children’s education fit into your budget.
This guest post comes from the editors of The Allstate Blog, which helps people prepare for the unpredictability of life.
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March 27th, 2012
What Is a Roth IRA?
Guess what? I’ve got a fever. And the only prescription... is more Roth IRA education! When Good Financial Cents blogger Jeff Rose asked a class of graduating college seniors if they had ever heard of a Roth IRA, out of the 50 class participants, no one raised their hand. (To be frank, I wouldn’t have been raising my hand in my day, either.)
December 16th, 2011
Friday Roundup: 6 Ways to Waste Money During the Holidays
6 Ways to Waste Money During the Holidays "What’s a few extra dollars here or there when holiday sales offer such a banquet of deals? It can’t hurt to blow the budget once a year. After all, you won’t have to pay down those credit cards until January, right? Wrong! No matter how caught up you get in the holiday-spending spirit, you should never compromise your budget and financial health. Here are six common ways holiday shoppers waste money, along with practical solutions to avoid such overspending." Financial Highway
December 14th, 2011
Wednesday Roundup: 3 Ways to Recover from a Holiday Spending Hangover
3 Ways to Recover from a Holiday Spending Hangover "There is still time before the holidays, but if you’re already feeling anxious about how much you have/will spend, don’t despair because you can recover – just don’t use breaking the budget a little bit as a justification for breaking it a ton! Here are a few tips that will help you get back on track and pay off the credit cards and/or get your bank balance back up." MoneyNing
December 7th, 2011
Broke Gal in NYC, Part 3: Frugal Finds at Holiday Time
December 5th, 2011
Monday Roundup: Why It Matters That the Savings Rate Fell
Why It Matters That the Savings Rate Fell. "After the economy took a nosedive in late 2008, Americans realized that it might not be a good idea to always rely on credit during emergencies and many people started stashing money away for a rainy day." Cash Money Life
December 2nd, 2011
Friday Roundup: Finding Things to Do That Don’t Involve Continually Spending Money
Finding Things to Do That Don’t Involve Continually Spending Money "Whenever an experience requires you to spend money, requires you to spend additional money beyond what you would normally spend, or heavily involves spending money, you should rethink whether or not you want to engage in that activity. Instead, it’s really worth your time to find things you enjoy doing that don’t involve spending money." The Simple Dollar
November 23rd, 2011
Wednesday Roundup: Why Can’t We Have Our Cake and Eat It Too?
Why Can’t We Have Our Cake and Eat It Too? "The English proverb tells us that we can’t have our cake and eat it too. I’ve often struggled to understand exactly what that means. I guess it’s supposed to imply that we can’t have it both ways. How can we preserve something of value if we continue to consume it?" Balance Junkie
November 2nd, 2011
Wednesday Roundup: 21 Frugal Ways to Reward Yourself Right Now
21 Frugal Ways to Reward Yourself Right Now "Like many of you, I’m busy. I have a full-time career, a husband and a home to take care of, and I play daddy to two adorable dogs. I don’t know how I do it, but I do. Sometimes, though, I need a break — a little reward for staying semi-sane." Wise Bread
November 1st, 2011
Review: SaveUp – Rewarding you for Saving
SaveUp is a new San Francisco-based financial website that takes an innovative approach to saving. To encourage healthy financial habits such as saving more, and paying off loans, SaveUp rewards players with the chance to win prizes from a $5,000 Home Theater System to a $50,000 college scholarship, or even a $2 million jackpot.
