4 Steps to Boost College Savings When Money Is Tight

4 Steps to Boost College Savings When Money Is Tight
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The average cost to attend a four-year public university is now around $10,000 to $24,000 per year, according to the College Board. And that’s just for tuition and fees.

The good news is that you don’t have to put off saving for a college education — whether for yourself or your child — because of tight finances.

The following steps can enable you or your child to pursue a higher education with a lot less sacrifice than you might think necessary.

Step 1: Rethink your plans

The traditional four-year degree is one of many routes. So, before you sign yourself or child up for it, consider whether another route could suit you while saving you money.

For example, consider an associate’s degree. You can get high-paying jobs with a two-year degree.

You can also get save a bundle on a four-year degree by attending a two-year school first and then transferring to a university for your last two years. Or you could simply attend a university part-time while working to defray costs.

As Money Talks News founder Stacy Johnson writes in “Ask Stacy — Should I Borrow $80,000 or Forget Art School?“:

When the going gets tough, the tough use imagination in place of money.

Step 2: Find the best savings plan

Each household is different, which means not every college savings plan fits every future college attendee. You have several choices, including:

  • Prepaid tuition plan
  • 529 plan
  • Roth individual retirement account (IRA)
  • Certificate of deposit (CD)
  • Savings account

Stacy breaks down the pros and cons of some of these and other options in “Ask Stacy — What’s the Best Way to Save for My Kid’s College?

Step 3: Stash the cash

The best way to regularly set aside money for just about anything is to automate it. Just like you might set up automatic payments for a monthly bill, you can set up automatic transfers from your bank account to whatever college savings account you have set up.

The earlier you start saving, the less money you’ll need to set aside each month. If you get a bonus or a raise, split the difference between your other bills, loans, retirement and the college savings account.

Some banks, like Bank of America, also let you put your “change” into a savings account, as we detail in “7 Proven Ways to Supercharge Your Savings Today.” Say you go grocery shopping and spend $41.39 on your debit card. The bank will automatically round it up to $42 and transfer the extra 61 cents to a savings account.

Step 4: Call your village

Loved ones want to shower children with clothes, toys, gear and other goodies. If you have a child, set up the right college savings plan ASAP. Then, instead of having your loved ones shower your kid with possessions, encourage them to put their money toward the college fund.

Clothes and toys are cheap and fleeting — a college fund is a much bigger and more worthwhile investment.

Do you have any advice for saving for college when money is tight? Share it by commenting below or on our Facebook page.

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