Top Tips for Saving for College – For most people, September marks the end of summer and the beginning of another school year. These tips for putting college savings within reach are brought to you by our friends at Michigan Education Trust (MET), Michigan’s 529 prepaid tuition program.
As your children head back to school this fall, I am sure paying for college tuition is on your mind. After all, another year older means another year closer to graduating high school. However, I have found that parents feel overwhelmed when it comes to college savings, especially with the rising cost of tuition. Fortunately, September is national College Savings Month – the perfect time to learn about the importance of saving for higher education. In honor of this special month, I wanted to share some simple tips that you can use to get started today.
Top Tips for Saving for College
Top Tips for Saving for College – Start Saving Early
Begin saving for your child’s college tuition as soon as possible! Consider this: Every dollar you save is a dollar that you don’t have to borrow in the future. In addition, contributing smaller amounts over time makes your savings plan more manageable than saving over a shorter period of time. A few parents I know put off saving for college until it was within their budget to do so. However, this also meant that they had to contribute more per month to meet their savings goals.
Top Tips for Saving for College – Open a 529 Savings Plan
Michigan Education Trust (MET), our state’s 529 prepaid tuition plan, allows families to prepurchase undergraduate tuition for any state resident. The prepaid tuition is based on today’s rates and then paid out at the future cost when the student is ready for college. Rest assured, this plan does not restrict a student’s choice in school – he or she can direct refund payments to any eligible university in the nation, including both private and public schools. In addition, both the total contract price and any monthly payments made are tax deductible on the purchaser’s state income taxes in the year the purchases were made, making it a cost-effective, flexible savings plan for Michigan parents. MET has been around since 1988, and more than 108,000 prepaid contracts have been sold.
Top Tips for Saving for College – Encourage Family and Friends to Help
One of the benefits of saving for college using a MET plan is that family and friends can contribute to your student’s college savings at any time. Since my parents now have fewer financial obligations than they used to – they are empty nesters who have paid off their home and cars – they now have extra room in their monthly budget to help contribute to my children’s college savings, even if it’s just a few dollars a month. In addition, instead of clothes and toys, I always encourage family members to give my kids college savings as gifts. They can also reap the benefits of their contributions being tax deductible.
Top Tips for Saving for College – Set a Savings Goal
In my experience, it’s always easier to reach your goals if you set manageable ones early. Instead of immediately facing the mammoth goal of paying for your child’s entire education, consider saving for a third of future costs at first. Furthermore, make reaching the goal more manageable by making monthly contributions using MET’s monthly purchase option. MET offers monthly purchase options in four-, seven-, 10- or 15-year increments depending on the age of your student. Payments can be made by coupon book, electronic funds transfer or payroll deduction. It’s important to re-evaluate your college savings plan every year to determine if you can manage your current contributions or if you have the opportunity to increase your monthly contributions. Every year, my husband and I re-evaluate our children’s college savings plans because a lot of financial changes can happen in a year – we may experience a raise in our income, car payments may end, we have moved, kids no longer require day care, etc.
Top Tips for Saving for College – Involve Your Child
While it can be difficult to engage your toddler in saving for college, you can easily involve your school-aged child in the savings process. It is not only an opportunity for him or her to gain a better understanding about the importance of saving, it is also a great chance for the child to make his or her own small contributions. Encourage your children to put money that they earn doing chores, babysitting or working summer jobs into their college funds. This will help them learn more about college and plan for life after their primary and secondary education.
This Top Tips for Saving for College article is provided by Michigan Education Trust (MET), Michigan’s 529 prepaid tuition plan which allows for easy transfer of undergrad tuition for any child residing in Michigan. For more information, visit www.SetwithMET.com.
Saving for college is within your reach! Enroll in a MET contract today! Open enrollment for the 2016-17 period ends on September 30, 2017.