Mohammad Shakil

· 24 Nov 2021

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Should Parents Save Money for Their Child's College Education?

My personal response to this, and remember that this is my decision to say yes. My wife and I want to have our first child and this is one of the first things we talked about before we even started trying to get pregnant. We both have a college education, we both have a continuing career, my grandmother had set aside money for me and my brother to go to college, and my wife paid for it with bursaries, grants, and school work. My father always said he wanted to give his family a better life than he had, and he always said to me that I would understand later in life. I understand and that is what I want to do for my future children. I don’t want my kids to end up with as many college debts as I do.

I hear a lot of people asking, if I will save for my children's tuition? Think of it this way, it is not the same for every student. Do you want your children to graduate from college and have the extra money to go to school if they want, or do you want them to try to get scholarships, grants, and jobs to help pay for school? These are all things that parents have to answer for themselves. If you are struggling to make a living and how do you save money for your college kids? The plan will allow you to create a budget and see what expenses you can reduce, or where you can save a little extra money. Remember, a small savings is better than no money at all.

You need to think about it this way, if you save $ 50 a month from the day your baby is born, when he or she turns 17, you will have an estimated $ 20,000 considering a 7% return on investment. If you save $ 200 a month instead, with a 7% return on investment by the time your child is 17 you will save about $ 80,000! If you would like to check out some savings calculators check out this resource at yoo.rs

But you may wonder why you can do it, or are there tax benefits? The answer is yes. There are tax benefits to savings in the section 529 college savings program.

What is Section 529 Plan?

There are two types of section 529 programs, one is a prepaid tuition program, and the other is a college savings program. Prepaid tuition programs allow you to lock future tuition fees at public colleges in the province at current rates usually guaranteed by the government. College savings programs are flexible, but do not offer a guarantee.

Benefits of Prepaid Learning Programs

-It is guaranteed that it will increase in value by the same rate as in college. If you pay in advance for a college education when your child is 5 years old, when he or she is 17 he or she will have increased the amount so that he or she can continue with the annual college education.

-Parers, grandparents, family, friends, can contribute to the 529 prepaid plan. This is great because you can take gifts and use them in the system.

-Prefunded tuition programs do not pay corporate income tax, nor are they usually tax-free for regional and local revenue.

-The money in the system is controlled by the account holder and not the child. Many parents love this feature, since they do not need to worry if a child starts spending money on non-college expenses.

-It is safe. an affordable option, suitable for the family who are not a financial expert or do not have access to a financial expert.

Benefits of 529 College Savings Plan

- Money in the system is controlled by the account holder and not the child.

-Have the ability to maximize potential investment returns depending on the level of return and the decision on how portfolio risk is determined. You can be very aggressive with 100% equity funds in a series that can be very much in the stock market.

-There is no limit to choosing a college unless it has to be an accredited college or university.

-Flexible investment options such as age-based definition if you start saving over time, you can cover lost time, and risk-based distribution depending on how you would like anger or savings.

What Planting Strategy Should You Use?

-The first proposal that I would say is most beneficial is to start early. It is not too late to start and it is not too late to start. The sooner you start the maximum interest rate you will earn in your child's life and the compound interest you can get from the earliest. This means you will have to invest a little money in your pocket if you start early to earn the amount of money you would earn if you started later in life.

-The second strategy I can use is to invest aggressively at the beginning of your child's life and gradually reach a rule-following portfolio. This will be the same strategy used when considering retirement. Would you really like to take the opportunity that one year before your child goes to college he or she loses 25-50% of his or her college bag? I would strongly recommend talking to a financial advisor or someone specializing in college savings to help you find the best investment strategy when it comes to your child's health.

-Get a Financial Adviser! I can’t stress this enough when it comes to your investment and investment in your college. If you do not know how to invest or how to get the most out of it, talk to someone who makes a living from it. They have more time, more resources, and more ideas for the best investment you can make in life. One of the strongest suggestions I can make is to find out who your mentor is and do not get caught up in the environment where they are making bad business decisions for you. Ask around and see who has the best updates, the best customers, and who has been in business for years. It's your money, don't let anyone waste it by not doing your own research.

-Use savings plans that have tax benefits for you. That means use the Section 529 system, or look for something where you can get a tax deduction for college expenses. If you do not do this, you will lose money at the end of the year when you file taxes and you must claim your interest. Also, do you research yourself to make a quality, knowledge-based decision.


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