Saving money for your child’s future college education is something many parents think about. Like with most savings goals, its best to start as soon as possible. First, you should consider how much you will need to save for college. There are several free college savings calculators on the web, but ultimately you will need to consider the state you live in, how many years you have left to save, the cost of tuition at the college your child would like to attend, what you expect their living expenses to be, how many years they’ll be in school, how much, if any you have saved already, and how much you can reasonably expect to receive in scholarships and grants.

If gathering this information feels challenging or overwhelming, don’t worry, it’s just an estimate and it can be adjusted later once new details become available. Below are a few different accounts to consider, along with a strategy to involve your child on their way to paying for college.

529 Plan
If you want to save additional money for education, or if you exceed the income limit for the Education IRA, a 529 plan may be a better option. Make sure the 529 plan you select gives you the freedom to choose the funds you invest in with the account. With a 529 plan you have the option to change the beneficiary to another person in your family if the intended recipient chooses not to go to college. 529 plans to not have annual contribution limits and there are not income limits or age restrictions for use of the account.

UTMA or UGMA (Uniform Transfer/Gift to Minors Act)
These accounts are designed for more than just education savings. The account gets set up in the child’s name but is controlled by a custodian (like a parent or guardian). The child is eligible to access the account when they turn 21 (or 18 for the UGMA account). The child is allowed to use the account any way they want.

Students who plan to pursue higher education should also be involved in the college saving process. Even though they are students, they can still help to build their funds, or apply for scholarships to help with the task of paying for school. By involving them, it will help them understand the cost of college and hopefully it will establish a healthy understanding of money and savings habits. Here are some great ways for your student to start getting involved in the college saving process:

Get a job
Whether your student works full time during the summer, or part-time during the school year, it will be helpful for them to begin to gain work experience, and a paycheck to put towards college tuition and expenses. Bonus points if the job is related to their desired field of study. For example, if they are interested in becoming a chef, they can apply to wash dishes in a kitchen, or if they’re interested in the medical field, they can apply to help at a local nursing home, which will help them gain industry insights and build their network while working.

Volunteer
Although volunteering doesn’t pay cash, it will help when applying to colleges, and scholarships. The volunteer experience will look good on their application and help them get a leg up on their peers. Their time volunteering will also expand their network and potentially help connect them to other opportunities

Apply for scholarships
Scholarships are free money and there are all different types. There are scholarships for sports, academics, extracurricular activities or even location-based scholarships for members of certain communities. If your child is eligible to apply, they should apply. Any amount of scholarship money can help toward limiting the amount you have to pay out of pocket.

Take Advanced Placement (AP) Classes
Advanced Placement (AP) Classes can count as college credits depending on how well the student does in the class. If your student already has college credits, that’s one less class you will have to pay for when they are enrolled in college.

Open a savings account
By opening a savings account, your student will have a place to begin building their funds. Visit a branch or contact a member of our team today to learn more about our savings account options.

Learn to save money
Chat with your child about saving money. Share your saving philosophy and explain how important it is that they set savings goals. Whether it be for a car when they get their license, or money to contribute toward their college tuition and expenses, it is best to get them involved in the savings process as soon as possible.

Ultimately, saving for college is a process that takes planning and teamwork to accomplish the goal of graduating debt free. The sooner you get started, the better.

Many people are interested in investing but most are not sure where to start or who to talk to.  You are never too young or too old to start your investment journey. Investing comes with risks but the sooner you educate yourself on investments and processes the sooner you can dive into the market.

Discovering your goals and outlining a clear road map of what you want to gain with your investment are the first steps to take before beginning your investment journey.  Some investments fulfill short-term goals while others are set up to benefit you long-term.  After you establish your goals with investing, it will become clearer on what types of stocks or companies are right for you to invest in.

Opening and putting money into a savings account is just one simple way of learning to save money and can be a good first step.  Investing in your savings is an option if you want access to your money whenever you want, but in general, interest rates are rather low. This can be a good way of teaching teens to start saving early and generating a little interest while still in high school.  Age is an important factor to consider when deciding how much risk you should take while investing.  The younger you are when you start, the more risk you can take because you have less to loose so it may be smart to look into something more risky than just a simple savings account.

An individual retirement account (IRA) is another account that many people put money in to save for a later date by allowing tax deferred savings for retirement.  An IRA account is not an actual investment but it is a good place to start accumulating more money for later in life.  You can access your money early but you will face an early withdrawal penalty fee.  Putting money into an IRA account can help you have a bit of a money cushion when you reach retirement age.

Investments are one of the only ways to keep up with inflation and one of the best ways to see growth on your money.  It is important to remember that investments are always tied to a risk.  You may win money and you may lose.  There are no guarantees.  When you purchase stocks you are purchasing a small piece of a company and stocks often come with the greatest rewards and loses.  One positive factor of buying stocks is you can actually track the stock market and see how your investments are doing.  You don’t need to check the markets all of the time though.  When you decide to purchase a bond you are essentially loaning money to an entity and you will be paid back plus interest after a fixed period of time.  Spreading out your investments, or diversification, is suggested because if you place all of your money in a particular investment and it fails, then you are left with nothing.

When it comes to investments, start young, do your research, and find out what the greatest return is for your individual goals.  It is never too late to start your investment journey.

For more information on savings accounts please visit us at www.gbtonline.com or click here to find the address and telephone number of your local branch.