Expert on saving for college says to ‘save as much as you can, as frequently as you can’

With the cost of college front-and-center for so several parents families are looking for techniques to save so their children have money set aside One of the most of popular tools for that is the plan a tax-advantaged funding account designed for development savings Kaitlyn Large a mother in Montgomery County Maryland uses that method to save for her two daughters who are and years old I opened a for each girl shortly after they were born as soon as they had a Social Safety number Large mentioned I ve consulted with my financial adviser and given the amount that we re putting in each year and with the inflation rate I think they re set up to graduate debt-free The plans offer certain advantages when used for qualified learning expenses such as in-state college graduate school and apprenticeship programs They have essential tax and financial aid advantages mentioned Mark Kantrowitz an author and nationally recognized expert on trainee financial aid scholarships and novice loans The money like in a Roth IRA accrues interest on a tax-deferred basis and it is entirely tax free if you use it to pay for qualified higher tuition expenses When choosing a plan investors have several options Kantrowitz recommended a dynamic outlay strategy that begins with greater exposure to stocks for advancement probable then gradually shifts toward other investments such as bonds When the child is young you have a higher percentage of financing stocks because if there is a downturn you have countless years to recover from those losses Kantrowitz declared To find a plan he suggested families entirely search online for the name of their state along with plan to explore available options They can also find answers to plenty of questions at savingforcollege com Kantrowitz also encouraged families to begin contributing to a plan as early as realizable Time is your greatest asset he explained Every dollar you save is a dollar less you re going to have to borrow I think it really sets you up for success With the financial sector with inflation I don t know what university is going to be like in years from now Large added I really would like to avoid taking out loans Kantrowitz suggested setting up automatic contributions from a bank account I typically recommend that you save a month per child but certain people just can t afford that so you save what you can and you make it automatic you ll speedily get used to not having the money in your bank account Kantrowitz stated For Large automatic payments are key The money is only withdrawn from her account each month I budget for it it comes out and that gives us a nice tax break at the end of the year Large declared I did a fair amount of research and went with that approach Families can adjust their contributions over time based on financial flexibility and Kantrowitz s advice is to save as much as you can as frequently as you can It pays to do selected research and then once you ve done the research you can set it up and forget it Kantrowitz noted Source