Majority of students use 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 child does not have to study on college student loan.You can prepare for early for your child’s college education. You need to save to get rid of the burden of student loan. This guide offers you ways to save for your child’s higher education.
It is essential to have in mind that every penny counts. The earlier you start saving, the bigger the savings will be. In order to grow your savings, you need to have a budget you can stick to.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 advantages of Roth IRA.Roth IRS helps in covering college costs despite it being an individual retirement account. The money is usually tax free.The money can be used for various investment options such as stocks and bonds. The good thing about Roth IRA is that withdrawals for contributions are penalty free.
You can choose to open an education savings account.For those who can afford to save more than $2,000, it is ideal compared to a regular savings account.It offers a savings plan that is tax free.It is tax free to make withdrawals that are education related.You also have the alternative of choosing between different investment options.You have the flexibility of growing your money.
Also, you can set up a 529 education savings plan. It is an alternative if you are not qualified for an education savings account. 529 plan can be used for withdrawing against different college cost. It also covers board and room and not tuition alone.You can withdraw the money and use it across all universities and colleges.You can change the name of the beneficiary with this plan.
Consider an educational trust fund for your child.You can name your child as the beneficiary and a different person a trustee. 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 still maintain your work while making money on the side. Choose your tenants well for a long term relationship.
Additionally, you need to master 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.