If you’re a parent, helping your kids avoid or minimize college debt is a goal you’d like to help them tackle. Right now the average price for a public four-year college is $25,290 in-state ($40,940 out of state) while a private college hovers around $50,900. Estimates say that college tuition and expenses are increasing drastically faster than wages.
It’s becoming increasingly obvious that families have to get proactive if they want their kids to minimize (and maybe skip) taking on student loans, we have to start saving now.
One of the more popular ways to save is a 529 plan. You can think of them like an IRA for your kid’s education. They’re an investment account where your money can grow while your child does too. They can use it for education expenses like tuition, books, and needed supplies at schools that receive federal financial aid. The growth is entirely tax-free and the withdrawals are tax-free as long as you use them for higher education.
How Can We Save More for College?
The two biggest challenges I hear (and I completely understand) from parents about why they’re not saving are:
No room in the budget to start. Parents have their money stretched thin over several goals like current essential bills, paying down debts, and saving for emergencies and hopefully retirement. There’s not much left to sock away for college.
No spare time for a second job. Between taking care of the kids, work, and other important obligations, there’s no free time for many parents. The idea of having to take on a second job is just not on the table.
I totally understand, with two kids, we also have to be strategic with how we spend our time and money.
6 Ways to Save More for Your Kid’s College Fund
If you’re eager to try and stash something away for college, I want to share five ways you can start saving and making more money. If you can give an hour, maybe two at most a week, you could save and earn money for your kid’s college fund.
1. Cancel an Unnecessary Subscription
One of the easiest wins we can have with money is reviewing our subscriptions.
I’m not against them (we have some!), but paying attention to those $10, $20, $40/month charges may free up some serious cash that you can use for your kid’s college fund. I’ve done this – years ago I signed up for one of those beauty box subscriptions. It wasn’t much, around $20 a month, and I enjoyed getting some goodies in the mail. However, fast forward a few years and I felt differently. I had most of the samples at least once and I figure out which products I liked and which I didn’t care for. Canceling that subscription along with my husband’s, saved us $360 year!
Do you have something similar? If you’re not getting as much out of your subscription that you used to, seriously think about canceling it (or do a pause to confirm whether you truly enjoy it or not).
2. Negotiate and Hunt Around to Lower Your Bills
I’ve noticed that certain bills like insurance and the cable bill have a habit of creeping up.
One of the ways I’ve fought back and saved significant amounts of money is by negotiating bills with the customer service representatives. Calling up one bill a week or even a month can be a real win. Whether you get a discount with your current provider or find a better deal elsewhere, that money saved can be better used in your college fund. We had saved around half with our car insurance one time because I was willing to switch to a lower plan.
Don’t have time to hop on the phone? You can use a service like Trim to take care of your bills for you!
3. Get Money Back When Shopping
Whether you’re shopping in person or online, we’re all looking at getting the best deals.
If you’re looking to save more, two of the best tools you have are your phone and your computer. Sites and browser apps like Retailmenot, Honey, and Ebates can allow you to either find a coupon code to snag you a discount or you can get a rebate on certain purchases. If you’re at the store, using apps like iBotta, Fetch, and Checkout 51 can allow you to get some money back while you’re shopping.
4. Easy Side Hustles
Side hustles can seem like a turn off for some since they think you have to be driving around town either with people in the back seat or delivering food. They can be low stress and even fun – you just have to find the best side hustle for you.
Besides deliveries, some families have found dog walking, either through an app like Wag or old fashion word of mouth in the community, can be a way to relax and earn some extra money. If you’re looking for an even less stressful gig, have you consider electric scooter charging? They’re popping around in different cities. If you have a spot in your neighborhood, you may be able to swing by them at night, grab them for a charge up at your home, and drop them off in the morning.
Kevin has done this side hustle, earning $15 and $25 on his way to work. Even going on the low end with $15 a day, you’d make around $300 a month. That’s a nice little profitable commute!
5. Ask loved ones to consider gifting for college
One fantastic way to boost your college fund is letting your loved ones know about it.
We don’t tend to talk about money, but things like saving for college can be easier topics to discuss and you’d be surprised at how many want to pitch in. When grandparents, aunts, uncles, and friends ask about what to give, go ahead and mention that you’re saving up for kid’s college. Instead of buying a toy or gadget that may or may not last the season (or even month), they can take half of that gift money and contribute towards the college fund. Those contributions add up and are a huge win for your kid.
There are fantastic online options like CollegeBacker that made it easy for family and friends to contribute $5, $10, or more. Not all of these ideas may work for you, but even one or two can help you get started with investing in your kid’s college fund without too much effort.
6. Stash Away That Money
Once you’ve saved or earned that money, make sure you set up an automatic contribution for the 529 plan you opened up.
If you saved on a recurring bill like cable or subscription that can help jumpstart things. Let’s say you canceled a few subscriptions and got a better deal with your internet and now you have an extra $25 week or $100 a month and you open up a 5209 and start contributing when your kid is six years old. How much do you think you’ll have?
That is a huge win for you and your family!
Your Take on Save for College
I hope these ideas make it easier to get started with your kid’s college fund. Please try these ideas out and let me know how it goes!
The post 529 Plan: 6 Ways Parents Can Save More Money for Their Kid’s College appeared first on MintLife Blog.