Kids will not stay kids forever. They will grow up and eventually go to college. That is a dreaded thing if you do not plan ahead. Setting up a college fund is a fantastic idea and you can do this to ensure that your child has no problems when they make their own degree to finish.
Kids seem to grow so fast nowadays. One time, they are still asking you how to spell your name, and the next they will ask for advice for the right college or university to choose from. It is necessary that while they are still young, parents are already saving up for the future educational ventures of your child. Setting up a fund for your child education does not have to be difficult. It can be as simple as you want. You start small and eventually, you will begin to develop your savings ready for your child?s education. Here is some thing you should take into consideration.
Early decisions
You cannot make a decision as early as now as to what kind of degree or school your child will choose. As much as you are holding on to the dream that your child will nab a scholarship, planning the college fund is more practicable. You have to do a bit or research as a start. You want to make sure how much the current rates are when it comes to tuition fees in several schools. In a few years, given that inflation will affect everything, how much should you project? Of course, this depends on how much you are earning. It is important that you plan for this way before you and your partner decided to conceive a child.
Setting up the account
Some people just save money in a regular savings account. That seems decent and fine. However, there are some limitations. First, most savings account are not optimized for your college fund. If you want, ask the bank if they offer any plans for setting up a fund. Some funds are tax free but it all depends on the bank and jurisdiction. There are some financial institutions dedicated to handling funds for you. You might want to research about these companies, check their rates and most importantly, see if the company is stable and has no signs of weakening. The last thing you want is for your funds to turn to dust when your child needed it.
Plan how much you will put
As your child grows, you will find them getting interested in many things and they will also have some dream jobs on hand. Cost of medical education is way higher than the cost of studying accountancy for example. You must adjust throughout the years how much you will put and this will help you in reaching a particular goal. You must have a particular goal with how much you spend so that you can make adjustments and have a clear end point. Saving aimlessly will also not be helpful as you might be overlooking some important aspects other than the fund.
Be sure that you do not use the money until your kid is ready for college. If you use the college fund before the expected time, there are big penalties. Also, you should have made sure that the money is only allocated for your child?s education and that you have projected other costs that you will be paying for.
Vijay K Shetty,
Get more information on College Fund, Child Education
Source: http://www.articledirectoryproject.com/how-to-set-up-a-college-fund/
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