If saving for college, either for your children or your own continuing education, is one of your resolutions this year, here are four tips to help you get started:
Set a Goal
$33,000 is the average student debt per borrower for the class of 2014. With that number continuing to rise, it’s important for families to estimate what college might cost down the road and how much they need to save.
Although this task may seem daunting, Edvest’s College Savings Planner can help. Using your child’s current age (or your own) you can get a better picture of how much college will cost once your child is college-age, as well as how your contributions will add up.
Create a Plan
Once you have a clearer picture of how much college will cost, it’s time to evaluate your financial situation. How much can you afford to contribute each month? Are you planning to save for full or partial tuition?
From there, set your goals! The more you invest and the earlier you start, the more your money has an opportunity to grow. $50 per month could mean $26,806 in 18 years, whereas $200 per month could mean $85,200.* Whatever amount you can save, remember that every little bit helps!
Once you have determined how much you can afford to save, the next step is to identify which savings tool is best for you and your family. Edvest offers 22 different investment options, ranging from age-based options to multi-fund portfolios. Each plan varies in investment strategy and degree of risk, allowing you to select one option or a combination of options that will match your investment style and savings goals.
Make it a Habit
After identifying which college savings plan is best for your family, start saving and make it a habit!
Automatic contributions and payroll deductions make it easy to “set it and forget it.” Consistent contributions ensure that your college saving goals stay on track.
Ask for Help
Family members and friends can open an account for your child or contribute to an existing account through Edvest’s gifting program. Contributions can be made online or via the mail and may be eligible for estate and tax benefits – up to $3,100 per beneficiary in 2015. And don’t forget, you may open an Edvest account or contribute to an existing account and still potentially qualify for the Wisconsin tax reduction if you are a Wisconsin resident.
If you’re ready to start saving for college today, or have questions, please visit www.edvest.com for more info or give us a call at 1-888-338-3789 (Monday – Friday, 7 a.m. to 7 p.m. CST)
The tax information contained herein is not intended to be used, and cannot be used, by any taxpayer for the purpose of avoiding tax penalties. Taxpayers should seek advice based on their own particular circumstances from an independent tax advisor. Non-qualified withdrawals may be subject to federal and state taxes and the additional federal 10% tax.