The best means to save for college depend on several factors, including the age of the individual. Teenagers can begin saving for college by getting jobs while they are studying. It can also be very helpful to ask for cash as gifts. Adults are likely to find that balancing their budgets will reveal funds that can be saved. If those funds are invested, they may grow faster than if they are merely left in a savings account.
Teenagers who will be wholly or partially responsible for their college expenses should begin saving money as soon as possible. One of the best ways to do this is to get a job. While working and studying can definitely involve a great deal of responsibility and sacrifice, many students find working part-time to be very feasible. Furthermore, accumulating money during this period of life can be financially beneficial. Teenagers who opt to get jobs should strongly consider increasing the number of hours that they work during holidays and other breaks from school.
Another excellent way of saving for college is by asking individuals to modify their gifts. There are often occasions such as Christmas and birthdays when individuals are likely to give a student gifts. Instead of accepting material items, a person may request cash for college. It may be helpful to establish an account and allow individuals to make deposits so that they feel more confident that the request is not just a scheme to get money for frivolous purposes.
Adults who are interested in saving for college, whether for themselves or their children, should begin by assessing their budgets. Outlining all monthly expenditures will provide an overview of the portion of income that is spent on obligations versus the amount that is spent on leisure. Once this is determined, individuals should make a commitment to reducing the amount of money used for non-essential purchases and instead put those funds into an account that is used solely to hold money dedicated for educational costs.
While saving for college, it is wise for a person to consider alternatives to ordinary savings accounts. If the money is invested in items such as stocks or certificates of deposit (CDs), it can grow substantially quicker than it would in a savings account. Another option to consider when saving for individuals who are less than 18 is a Coverdell Education Savings Account (ESA). These accounts allow a limited amount of money to be contributed annually for the sake of a beneficiary. These funds are allowed to grow tax free, and they may be distributed without tax obligations if they are used for qualified educational expenses.