3 Reasons Why You Should be Saving for Your Kid’s College Fund
Avoid stress later by saving for your child's future.
If you're still wrestling with diapers and checking under the bed for monsters, college probably seems light-years away. In terms of your savings, though, it's much closer than you think. When it comes to building a fund for college or any other future for your child, it's never too early to start. In fact, the sooner you start the better. If you're not yet convinced, here are a few reasons why:
College costs are rising
The reality is that college just keeps getting more expensive. With tuition, room and board, textbooks and other costs, it just means that once your child is ready to head off to school, it could be even more difficult for you to afford without a savings account.
With the Bethpage “Save For Their Future” calculator, you can determine exactly how much you need to put away each month to save up for college costs. Enter your child’s age, the money you have to open the account, what you’ll contribute and how frequently and how much you want your child to have when he or she reaches age 21. This will give you the right starting point for your savings.
More time reduces your contributions
One of the most compelling reasons to start saving now is that the more time you have, the less you'll have to contribute at once to reach your goals. If you start when your child is still in diapers, you only have to put a little away each month in a savings account, as opposed to if you waited until your child is actually touring campuses
If the one thought holding you back from starting saving now is that you don't feel like you have the right income to do so, you may not be looking close enough. Examine your monthly budget to see if there are any unnecessary expenses that you can reduce or eliminate to accommodate these plans.
For instance, monthly payments for magazine subscriptions or daily coffee runs can easily add up. Cutting these small expenses out of your budget can ultimately make a huge difference and help you put a dent in the college savings fund.
It won't jeopardize your chances of receiving student aid
Another reason parents hesitate to start saving is the fear of becoming ineligible for federal student aid. However, this just isn't true.
It's unlikely that your savings will affect your child's chances of getting aid. If you're uncertain, you can check your child's eligibility and estimate what they could receive in student financial assistance. Regardless of the answer, it's always a good idea to have money saved up. The reality is that you'll at least have to cover some, if not all, of your child's college expenses. Saving now means that you'll have to rely less on loans to get this money, helping your child leave college free of debt.
If you're ready to start a savings account for your child, you can open a Youth Account with Bethpage today, which includes a free ATM card and access to online banking, telephone banking and electronic statements. Plus, these accounts have a 4.00% APY* on the first $1,000.00, compared to the 0.02% offered by other regional banks. We want you to watch your money grow and give your child a solid foundation for the future.
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