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Tips to plan your Savings
Tuition fees for college need a lot of planning, for parents it is also advisable to start saving well in advance to avoid stress at the last moment. Scholarships are life savers; to avails this students need to prove ability and need to have a strong resume that should effectively highlight their achievements. This will make it easier for community helpers and charity institution to raise some help.
Start Early on Savings
It is advisable to start early to avoid the pressure for the future; this would be something like a recurring deposit, save $80-$100 a month for 15 years on a base level savings plan in terms of returns. This would help you churn out a substantial sum by the time your child is ready for college. You might not even need a loan if you plan early.
Try Mutual Funds or Equities
Investing in mutual funds will guarantee you safe return on investment. Mutual Funds have a no risk option in which your fund manager can invest in bonds, debt or some quick earning options for instance equities. The advantage with Mutual Funds is you don’t need to manage it and have professional looking into your investment. You can even avail the 60/40 option in which you invest 40% in safe returns like bonds or debt and the remaining in stocks or equities. With sensible investment you could guarantee both short and long term returns.
You can also entirely invest in stocks; this is a risky option but the returns are significant if you invest correctly.
At least save a proportion of your Child’s Eventual Requirement
You should give your best shot in terms of saving for your retirement and your child’s education. Availing government or federal grants can lower the burden but at the same time you do need some planning
Take a Loan
Taking a load is a way of ensuring payment towards your graduation, plus you don’t need to need to pay it off till your child graduates. Also availing a student loan is far simpler as compared to a personal loan. In fact the student can themselves pay off the loan once they find employment after graduation. It would be always beneficial to have some savings this can reduce the loan burden on your child in terms of the borrowed amount.
A penny saved is a penny earned; today there are various saving schemes that offer you heft tax breaks. 529 savings is a good example of savings on tax, you can withdraw tax free up to $200,000.
To sum it up all one must understand education is a must for the growth of our children. With rising costs of living and tuition fees it is advisable for parents to make planned and small savings well in advance. There are investment options for both strong and the faint hearted. The choice of investment varies with every person but the key to saving for your children is to start early.
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