Studies show that many more households today make an effort to save for college, either through a basic savings account at their credit union in New Bedford, or through a money market account, certificate of deposit or other college-specific savings program. Unfortunately, many do so at the expense of being able to save for retirement. While college is important, make sure to place equal importance on preparing for your retirement through credit union savings accounts or IRA investments. There are always college loans, financial aid, scholarships and other programs to help your children pay for a secondary education. However, there aren’t many options for retiring seniors who need help, outside of a pension, retirement savings and social security.
Before you start saving for your child’s college education, which could be ten to twenty years in the future, make sure to start saving for your own retirement as well. For example, if you are able to put aside 10 percent of your wages into savings, place half into the college fund and half into retirement. If you are able to put aside 20 percent of your wages into savings, which is the recommended amount by most financial experts, then 10 percent could go toward retirement and another 10 percent could go toward college. Once you have your college fund completed, shift that investment back into your retirement to pad your savings. This will ensure that you don’t become a burden on your grown children one day and that you are able to financially provide for yourself and your spouse.
Other Things to Do to Prepare for Savings
Did you know that you need to prepare yourself financially in order to effectively save? This is true whether you are saving for college, retirement or a down payment on a brand new home. In addition to figuring out how much you can safely put away into a credit union savings account or other type of savings program at your credit union in New Bedford without putting yourself under financial strain, you also need to take care of other financial details that will help you to be a better saver.
Some of those details include:
- paying off any high-interest rate loans and credit cards
- make sure that your own student loan debt is completely paid off
- set aside approximately three to six months worth of household expenses, including mortgage payments, minimum credit card payments, utilities, groceries, and other monthly expenses, when you join St Anne Credit Union in New Bedford
- set aside what is known as an “accident fund” to pay for unexpected, yet important, events; medical bills, car repairs, car rentals in the event of an accident, etc.
How Much Do I Need?
Depending on the type of college your child gets into, you may need more or less than the national average cost to support them while they are receiving their education. College funds go to pay for tuition, books, supplies, dorm fees or other food and lodging while they are away at school. If your child picks a local school and stays at home, you could save a lot of money, however if they choose a school on the other side of the country, you could end up paying a lot more. The cost for college at a four-year institution as increased more than 50 percent in the last 10 years to around $38-40,000 a year. You need to consider how much this will cost you when your child is college age, whether that is 10, 15 or 20 years from now.
Work with your financial planner to determine whether a certificate of deposit in New Bedford would be a smart way to grow your money or if there are other savings options available for credit union members. When you join St Anne Credit Union, you gain access to our team of friendly, knowledgeable, and helpful financial planning experts and customer service agents. We can help you find new ways to grow your money, from a basic credit union savings account on up to even more savvy financial investments. Many people do not realize that all of these opportunities are available at their local credit union in New Bedford.
To learn more about St Anne Credit Union in New Bedford or to become a member by opening a credit union savings account, give us a call at 508-993-0011 or stop by our location on Union Street. We can help you with money market accounts, checking accounts, IRA savings accounts and certificates of deposit in New Bedford, along with many other savings and investment opportunities. Call today to join St Anne Credit Union and see why so many people in Southeastern Massachusetts have trusted our credit union for so many years!