As the cost of higher education continues to rise, it has become increasingly important for parents to start saving for their child’s college education as early as possible. Investing in your child’s future can seem overwhelming, but taking small steps today can make a big difference in the long run. In this article, Zorayr Manukyan will share some tips and tricks to get you started on your college savings journey.
Zorayr Manukyan On Getting a Head Start On College Savings
One of the best ways to start saving for college is through a 529 plan, says Zorayr Manukyan. A 529 plan is a tax-advantaged investment account specifically designed for college savings. A big advantage of 529 plans is that earnings on investments grow tax-free, and withdrawals are tax-free as long as they’re used for qualified education expenses. Additionally, some states offer their own 529 plans, which can provide further tax benefits. It’s worth noting that some 529 plans have age-based investment options, which automatically adjust investments from a more aggressive mix of stocks to a more conservative mix of bonds as the beneficiary approaches college age.
Another important element is to consider the cost of attendance. A sound strategy means that you have a good understanding of how much you will need to save to cover the costs of college. You should start by researching the cost of tuition, fees, room and board, books and supplies, and other expenses at the colleges your child is interested in attending. You should also look into financial aid options that your child may be eligible for, which can help you determine how much you will need to cover on your own.
One effective way to save more is through regular contributions. You can set up automatic contributions to your 529 plan, just like a 401(k) or other investment account. Even small contributions on a regular basis can make a significant impact over time. It’s worth noting that some 529 plans offer rewards programs that can help boost your college savings. For example, some programs offer cash-back rewards for using a linked credit card or shopping at certain retailers.
Another important factor is to avoid borrowing for college. Borrowing for college can lead to a lifetime of debt, which can be hard to manage after graduation. A study by the Center for American Progress found that nearly 65% of students who graduated from public colleges in 2017 had student debt. Avoiding debt can be tough, but it’s important to have an actionable plan to start saving early and, therefore, minimize the need for borrowing.
Starting a college savings plan as early as possible can help you build a solid financial foundation for your child’s future. According to Zorayr Manukyan, the earlier you start, the more you can take advantage of compounding interest and the more time you have to save. Additionally, saving for college can help teach your child the importance of financial responsibility and the value of higher education. This can encourage your child to work hard and to take their education seriously.
Zorayr Manukyan’s Concluding Thoughts
In conclusion, saving for college can seem like a daunting task, but taking small steps early on can make a significant difference. A 529 plan is a great option for those looking to invest in their child’s education, and you should research the cost of attendance carefully to determine how much you need to save. With regular contributions and rewards programs, you can maximize your college savings efforts. Finally, avoiding debt is key to minimizing financial burdens in the future. According to Zorayr Manukyan, by starting to save today, you can ensure that your child has the opportunity to receive a quality education without having to struggle with the burden of student debt.