As you are most likely already aware, college tuition can be very expensive. Therefore, if you have a child, it is important that you begin to formulate a plan to send your children to college long before they are old enough to go. If you wait until your child is a senior in high school to start thinking about his or her college education, there is a good chance you will run into some problems. You do not want your child to need to rely on grants, scholarships and loans to pay his or her college tuition. Even if you can’t afford to pay for the entire tuition yourself, your child will certainly appreciate any help you can give. That having been said, here are some ways you can go about saving money for your child’s college education. 1. Savings account This is the easiest and most basic way to begin saving money. Remember, it is never too early to start saving. Ideally, you should open a checking account specifically for your child’s education as soon as he or she is born. Put as much as you can into it every week. If you do this consistently, and if you do not take any money out without replacing it, your child should have a healthy sum to use for college tuition.
2. 529 savings plan A 529 savings plan is a way for parents to save for college that is becoming more popular. It operates in a similar fashion to a 401(k) or an IRA plan. Basically, they enable parents to save money for educational purposes without having to pay taxes on the money they have saved. This is done through a variety of investment options that the parents can choose from. There are certain investment options that are more aggressive in the way they invest the money during the child’s younger years. As the child gets older and prepares for college, the money is shifted into investments that have a greater amount of stability. You can ask a private bank Singapore for more information.
3. Roth IRA When a child gets his or her first job and officially starts to earn income, the parents can open a Roth IRA. This is an excellent way to save for education and retirement because the money is allowed to grow without being taxed. However, the parent who opened the account will need to be at least 59 to take money out without a penalty.