How To Save For Your Child's College Tuition

American Investment Planners LLC

500 North Broadway, Suite 260, Jericho, NY 11753

(516) 932-5130 / (866) 932-5130

For any parent, college is a topic that is thought about for years and years prior to their child's actual participation. And as education costs continue to rise, it has become even more important for parents to start saving as early as they can.

Do you have a child who will be entering college in the near future? If you'd like to avoid the hassle and stress that comes with paying off excessive student loans for years following your child's graduation, consider the below money saving tips:

1. 529 Plans: 529 plans are state plans that are specifically dedicated to one area of savings; college tuition. These accounts are an excellent place to start since any money you put into it is automatically put aside for tuition costs and tuition costs only.

2. Coverdell Education Savings: Just like a 529 plan, this type of account is designed just for college saving purposes. However, it is important to realize that you are limited in how much you can put away every year, so you may need to use additional saving methods if you plan to put away thousands of dollars every 12 months.

3. UTMA/UGMA Accounts: UTMA and UGMA accounts are custodial accounts that work like trusts. That means if you have assets that you would like to wind up in your child's hands, you can put them here so that they can't be touched. But, keep in mind that colleges do look at these accounts when determining how much financial aid will be distributed, so having more in them could potentially hurt your child's ability to get additional help.

Lastly, although they are unlikely to want to put aside some of their allowance or income from their first job, it doesn't hurt to ask your child to contribute to a college savings account of their own; you and them both would be surprised at how quickly just a few dollars each week or month can add up!

If you are preparing to help your child with their college costs in part or in full but aren't sure which method of saving will benefit you the most, contact American Investment Planners LLC today! Our team will work with your family on an individual basis to determine which approach will work best in your favor. For more information, please contact us at (516) 932-5130 today.