As students prepare for college entrance, many families worry about how to meet the ever-rising costs of higher education. Saving for college may seem like a daunting task to any family, but rest assured, there are ways to sock away money for the cost of a four-year academic program. By being creative, making good use of time and expanding your horizons, you will be able to save for college without incurring massive debt.
1. Cut Back
There is money to be found if you look for it. Cut back on some of your monthly expenses and use those savings to defray the cost of college attendance. Ask your insurer about how to get lower car insurance rates. There are many insurers that will lower your costs if you have gone without an accident or claim for a set period of time. Simply compare car insurance quotes to save. Another way to save for college is to avoid frittering. Frittering is the act of wasting money on small, unnecessary purchases. Most people don’t realize how much money they fritter away every month on small, insignificant things.
If you buy lunch at work every day and spend $5.00, at the end of the year, you will have spent $960. Over the course of five years, that totals nearly a whopping $6,000. Cutting back on lunches at the office is the equivalent of a semester’s worth of room and board at a public university. Make an accounting of the little things you fritter away money on and use that money toward college savings.
2. Time is Your Friend
Many problem wait until their children are teenagers to start saving for college. While this may seem like a sensible strategy, it often causes undue stress on both the student and the parents. The best time to start saving for college is before the child is born. Yes, while the child is still in the womb, you can start saving for his education. The power of compound interest will work wonders toward your college savings plan.
Consider this example:
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Starts saving $25 a month on the day the child is born.
Interest bearing account yielding 10% interest
On the child’s 18th birthday, family 1 will have saved $15,285
Starts saving $100 a month on the child’s 12th birthday
Interest bearing account yielding 10% interest
On the child’s 18th birthday, family 2 will have saved $10,075
See the difference a few years makes? The key to saving for college is to start often and save regularly. This savings could help your student loans lower
3. Give the Gift of an Entrepreneurial Spirit
Teach your student the value of business ownership and entrepreneurship. Allow him to generate ideas for a small business and develop his own business plan. A school-aged child can operate a comic book business, a candy sale business, a vending machine business or even run a table at a flea market. Encourage them to set aside a portion of their earnings for their college education. Open a bank account for your teen and teach them to contribute a portion of their paycheck toward their education savings fund. This will not only teach them discipline while saving for college, they will learn the value of entrepreneurship and business ownership which will also help them achieve academic success.
4. Get Involved
There are many organizations that offer college scholarships for students that need money to fund their education. Think beyond the traditional college scholarship granting institutions. Organizations like the YMCA, Girl Scouts USA, Boy Scouts and 4H often offer money for college attendance. For students who are academically proficient, there are academic scholarships in addition to need-based funding. Consider volunteer work that will pay for all or most of the costs of college. Organizations like Americorps will pay college students a monthly stipend in exchange for their time and efforts. Check into these programs that will help ease the financial burdens of college attendance.
5. Save During College Years
Even if you haven’t saved up enough money by the first day of classes, there are still ways to save on an education. Choose lower-priced state schools over the big name private colleges. Test out of certain courses in which you or your student are proficient. Many students choose to attend low-cost community colleges to complete their general education courses then transfer to a four-year university for their majors.
Use CLEP (College Level Examination Program) testing to complete some of your credits by examination. CLEP tests usually cost less than $50 for the exam and the study materials. Save money by commuting from home instead of living on campus. You can also earn money while in college by working a part-time job or participating in federal work-study programs that defray the costs of attendance.
There are many ways to save money for college. Simple things like lowering your student car insurance rates to free up extra cash make a big difference. In addition, saving early and often is a great strategy. Saving money from a summer job, working as an apprentice to gain valuable experience and testing out of classes also saves money on the cost of attendance. The sky is the limit when it comes to saving for college.