Whether you are putting money aside for furthering your own education or your plan is to start saving for a child’s education, the sooner you can start planning and saving, the better. Studies show that paying for college is the most expensive cost associated with raising children. In fact, it can even cost more to attend the average four-year college or university than it can to pay for retirement. Before you start to get overwhelmed, there are some tips that can cut the financial pain associated with paying for college.
Starting Small, Thinking Big
Ideally, we would all start saving for college the moment we find out that we are expecting a baby, but many things can get in the way of that type of plan. Diapers, formula and even daycare for the first few years can be quite costly, eating into a young family’s savings. The best plan is to set reasonable goals, factoring in the cost of raising a child through the infant, toddler, and early development years so that you will already be “in the habit” of saving for their education by the time they start shopping for schools. Create separate savings accounts at your credit union in New Bedford apart from your basic share savings and checking. This will help keep the money separate and make it less tempting to spend somewhere along the way.
Even agreeing to put just $20 a week into a savings plan can really add up without causing too much distress in the household budget. If you were to do that from the time your child was born, you could have $18,720 – not counting any interest – by the time they were 18 years old. While that $20 alone won’t cover the entire cost, which already can be $20,000 a year or more, it will get the ball rolling so you can make investment adjustments along the way. For example, if you were to double your savings half way through, you would accrue as much as $28,080, just by increasing to $40 a week by the age of 9. Switching that savings account to a certificate of deposit in New Bedford could boost your savings even higher. Credit union loans can help offset any difference that might remain by the time your child is ready to go to school.
What the Experts Say
According to financial experts who specialize in college savings, your best goal is to work with your local credit union in New Bedford to create a savings plan that will meet your needs. The minimum that you should save, according to these experts, is $200 per month. Make sure to ask about any tax benefits associated with your savings plan and find out how to grow your money with other types of savings accounts. Credit union loans can be obtained at a lower interest rate than many loans available through traditional banking institutions, but should still be used as a last resort after any savings. If you were to put $200 per month into a basic share savings plan apart from your New Bedford credit checking accounts, you would be able to have at least $43,200 saved for college, plus any interest that has accrued.
Finding New Ways to Save
In addition to taking advantage of all the opportunities available at your local credit union in New Bedford, such as credit union loans, money market accounts, and certificates of deposit, it is also important to find new ways to save from the household budget to put more money aside for college education. Studies show that the average American spends over $230 each month eating meals that were prepared outside the home. If you were to make a commitment only to cook your meals at home every day, you could nearly double your monthly savings.
When you think about how much it costs for a family of four to go to the movies, factoring in the cost of tickets at $15 each on average, snacks and drinks at around $30-40, it becomes clear that a monthly subscription to a streaming movie program would help to save money each month. Compared to $90-100 for a single movie, you would only be paying between $5-10 a month for access to unlimited premium movies. That’s another gain of $80-90 a month that could go toward your college savings. This doesn’t mean that you should never see new movies at the local cinema, just that there are lots of things that we take for granted that could help save us money.
Visit St Anne Credit Union in New Bedford
Stop by our local branch and speak with one of our representatives about all of the opportunities available to help you increase your savings with a basic New Bedford credit checking or savings account. Whether you are interested in a money market account or a certificate of deposit in New Bedford to boost college savings, our team can help you to achieve your goals. We also have some unique options for savings to help you keep your household on budget throughout the year, including a Christmas Club Savings program and Share IRA accounts for retirement planning. Give us a call at 508-993-0011 to speak with one of our friendly team members!