e. Savings tips to help you get there
These tips and easy-to-use tools will help you make clear, comfortable decisions regarding your savings and investment strategy. Remember it is probably easier to save for college when your children are young then when both you and they are older. The reason for this is that you will want to be saving for your own retirement at about the same time your children are heading off to college.
Start as early as possible
It’s never too early to save for college. While the cost of college can look scary, a college education can be more affordable than you might think. Keep in mind that, according to The College Board, most families don’t pay the full sticker price for college. Most students receive some type of aid.
Do your research
Check out the many tools and calculators provided by The Vanguard Group, which can help you determine the projected cost of college, your projected savings and your projected Colorado State tax deduction.
Define your savings goals
An important step in saving for college is determining how much you’d like to save. Most families calculate the projected cost of education and save toward that number. Others dedicate a percentage of their yearly income. Defining your goal helps you measure your progress and may motivate you to save more.
Compare college savings options
There are many ways to save for college. Use the College Savings Options Comparison Chart to see what might work best for your family.
Save as much as you can
It’s okay if you start small; the big thing is to start. The amount of money that you should save each month mainly depends on your financial situation and how much you can really afford to save. Take a look at your budget and see where you can make some cuts. If you find you can make a cut, redirect that money to your CollegeInvest 529 plan. Many people find that a few small changes can add up to big savings.
Save every bonus
If you should receive a lump sum of money—a bonus, an inheritance, a tax refund—don’t spend it. Sock it away in your 529.
Save when your expenses go down
If you have a younger child in daycare whose daycare costs decrease as they get older, put the difference in a 529.
Use automatic transfers
You can sign up to have any amount transferred from your checking or savings account into your 529 on a monthly or quarterly basis or work with your employer to have contributions deducted directly from your paycheck. Try to contribute at least once a month. Saving a little from each paycheck can be easier than depositing one lump sum at the end of the year.5
Increase the amount of money you save yearly
Try to increase your savings to the rate of tuition increases. For example, if college tuition increases at a rate of five percent, try to increase your savings contributions by five percent, too.
Let relatives and friends help
Suggest your relatives and friends give money to your or your child’s 529 college savings account, instead of presents your child will soon outgrow. Let friends and family know about the great programs that CollegeInvest offers to make gift giving easy like Ugift and Upromise Services, so they can contribute all year long.
To learn about CollegeInvest’s 529 program, its objectives, risks, charges, limitations, restrictions and qualifications regarding the Plans’ benefits and potential tax advantages, please read the Program Disclosure Statements (PDS) available at www.collegeinvest.org. Also, check with your home state to learn if it offers tax or other benefits for investing in its own plan. CollegeInvest and the CollegeInvest logo are registered trademarks. Administered and Issued by CollegeInvest.
5 A periodic investment plan does not ensure a profit or protect against a loss in declining markets.