You may not have a lot of extra money in your budget, but that doesn’t mean you can’t save for college. Here are six helpful money management tips for getting your college savings efforts off the ground.
Tip 1: Watch for daily money drains. Drink regular coffee instead of a latte once a day. Bring your lunch three times a week. Take the money you’re saving from small but important changes and put it toward your child’s college savings.
Tip 2: Save for college little by little. Use the money you are saving to make multiple, smaller contributions to your college savings, rather than a single, large contribution. Start with as little as $25 a month, because even a small amount over time adds up.
Tip 3: Save for college automatically. Make saving a priority. Deposit your budgeted college savings contribution from your paycheck right away, or set up an automatic debit plan. That way you’ll be less tempted to spend it on spur-of-the-moment purchases.
Tip 4: Get tax advantages where you can. 529 college savings plans, Education Savings Accounts (ESAs), and other vehicles offer tax breaks that can help your money work harder.
Tip 5: Ask family and friends to help. Instead of another toy, ask loved ones to celebrate birthdays and holidays with contributions to your child’s college fund. There are gifting programs that let others make contributions directly to a college savings account so you’re not on your own. This is an easy way to boost your savings with the help of others.
Tip 6: Don’t use retirement savings for college! There’s a wise saying, “You can borrow for college, but you can’t borrow for retirement.” Don’t leave yourself without retirement funds in years to come.