4 Tips for Creating a Savings Planner for College Education
Saving for higher education may seem intimidating. There are so many questions about where to start and how much to save. You’re unsure if your child will choose an in-state or out-of-state institution, public or private, two-year or four-year — the possibilities are wide-ranging and exciting. You’re also not sure how much college will cost in the future. The uncertainty of it all could make you wonder if you should create a savings planner. The good news: we can help. Discover these four helpful tips for creating a savings planner for a college education.
#1 Create a Savings Planner that Works for Your Family
Are you trying to get your family’s finances in order to prepare for your student going to college? Many people make the mistake of thinking that saving for college requires huge contributions only people in higher tax brackets can afford. Not true. Any amount you can save now will be money your student won’t need to borrow later.
The earlier you begin saving, the more time you’ll have to make small yet consistent contributions. 529 Plans, like the NC 529 Plan, are a perfect education-savings planner for families of all income levels. A 529 plan is the most popular form of saving for American families. With a minimum of a $25 contribution, an NC 529 Account is a favorable option where your contributions can grow tax-free over time. You’ll also be able to make tax-free withdrawals for college, K–12 tuition, and other education expenses.
#2 Develop a Savings Strategy
Determining the best strategy for your savings planner requires strategic investments. The NC 529 Plan has multiple investment paths, including age-based tracks from conservative to aggressive. You can also mix and match investment options to create the perfect portfolio for your needs.
Something to remember when creating a savings planner is that there is no one-size-fits-all way to save. There will likely be some months you won’t be able to make contributions. We understand that even when life happens, with an NC 529 Account, your money can continue to grow.
A helpful way to make contributions to your savings plan is to set up automatic contributions, so you can set your savings strategy and forget it. Here are ways you can save automatically:
- Enroll in a monthly or bi-monthly ACH draft from your bank.
- Establish payroll deductions with an eligible employer.
As you get a raise or bonus at work, aim to increase your regular contributions, or make one-time contributions if that works better in your budget. How you save is up to you. We’re here to help!
#3 Set Reasonable Goals for College Savings
Setting lofty and ambitious goals with a savings planner is tempting, but slow and steady usually wins the race. Review your finances and determine a reasonable and measurable amount you can contribute each month.
Explore our 529 savings calculator for a more accurate savings goal estimate. Select the institution your child is likely to attend and choose the percentage you’d like to contribute to their tuition. You’ll receive a recommended monthly savings amount. The 529 savings calculator is a great tool to help you make consistent deposits to prepare you for future college costs.
Another option to reach your savings goals is to look for ways to stretch or trim your monthly budget. Consider canceling unneeded subscription services, cutting back on eating out, and other money-saving tips to help boost your college savings.
#4 Encourage Loved Ones to Contribute
Giving the gift of education is a precious and valuable gift. The NC 529 Plan makes it simple for friends and family to contribute gifts to an account using a unique gifting link. Grandparents live to spoil their grandchildren, so why not spoil them with education? Holidays, birthdays, and graduations are the perfect time to spread the word about education contributions.
Any amount contributed to an account is money your child won’t need to borrow down the road. Get started by opening an account and making a $25 minimum contribution today.