In this job market, a college degree is vital to landing a well paying and secure job. Because of this, many parents are already worrying about how they will pay for their child’s college education years from now. College is expensive and the price tag is only increasing. Many graduates are finding themselves drowning in thousands of dollars of student loans.
As a parent, you want your child to enter the job market on their best standing without being weighed down by financial burden. Fortunately, your certified public accountant in Sacramento, CA can help you take the proper steps to help you start saving for your son or daughters college education. By saving money while your child grows up, you’ll have the peace of mind knowing your kids have a financial cushion when it comes time to pick a university.
Start saving early
Saving for college is probably the last thing you’re thinking about while holding your newborn baby. Saving for college is something you should begin thinking about relatively early in your child’s life. Think about it this way—the earlier you start, the more money you will have tucked away when it’s time for the first tuition payment. Meet with your certified public accountant in Sacramento, CA to determine how much money you’ll ideally need by the time your son or daughter turns 18. Then your accountant will help you calculate how much money you will need to save each month to reach that amount.
One major benefit of saving early means that you have time to determine which saving plan works best for you. While there are a variety of options, each savings plan offers different benefits. California residents can take advantage of a 529 plan, which works to help families better plan for future education costs. Another option to consider is an education savings account. This type of plan allows you to contribute up to $2,000 annually. While that might not seem like much, if you start contributing the maximum amount after your child is born you’ll have $36,000 by the time they’re 18! As an added bonus, all withdrawals are tax free. Still unsure which option is best for you? Then consult a certified public accountant to determine whether a 529 plan, educations savings account or another option entirely is best suited for your college savings goals.
Consider other options
You do not have to bear the entire financial burden of your child’s college education as there are many other options. Many universities offer a variety of scholarship and financial aid options based on educational qualifications, talent and need. Your child can begin applying for these in their early teenage years. Once you have a sense of how much outside funding you’ll be able to take advantage of, meet with your CPA at Yoder & Co., CPA. Our team of qualified professionals will help you find a way to pay for college without struggling—whether that means turning to student loans or savings. Contact us today to get started!