How much do you figure it will cost to send your newborn to Harvard, come the day? When that day comes, about 20 years from now, you probably will have a tab for about a half million dollars if not more. With that kind of an education bill staring down at you, as a parent, you have to be quaking in your boots; sure, you have nearly 2 decades to be saving money for college when it comes; but is that nearly enough?
America is certainly facing down a terrible situation with poor employment rates, jobs that don't pay that well, and bonuses that don't seem as forthcoming. If you thought you could count on your house to retain and grow its value, things seem to be going in reverse. And even if you do have a good bit of value left in your home, finding a bank that will make a home-equity loan, isn't what it used to be. Middle-class families haven't had much help from the president's new plans for the country; poor low income families are going to get the presidents guarantee on Pell grant financing, and it's going to be quite substantial too. And student loans are to get much easier to apply for. But we have young men and women in America graduating with an average debt of close to $25,000. How much larger a loan do we need? And don't hold out much hope for scholarships or grants either; those endowments were invested in the stock market too, and most of them aren't in very healthy shape. You know that saving money for college isn't what it used to be, when you have therapists getting patients in trying to deal better with their anxiety with college financing.
But it can still be done; as long as you approach the whole idea of saving money for college in manageable steps, there's no reason why you can't do a really good job. The first part of it is to understand that your goal is not to save for the entire cost of sending your child to a good college. That can't be done for even one child by most people, leave alone many. What you need to do is to go scientific on the problem. On average, sending your child to a four-year graduate program at a public university will cost about $70,000. If you save $60 a month the day your child is born, and put it in something that brings you a 6% annual return, you should have about $25,000 by the time your kid sets foot in college. While your child actually attends college, you'll need to set apart $5000 each year out of what you make then and there. $25,000 in federal student loans for four years should take care of the rest. Your child will need to be able to pay about $200 each month for 10 years to take care of that one, but it isn't a great deal. The earlier you start, the farther ahead you're going to get.
If you're really serious about saving money for college for your child, a 529 savings plan is still your best bet. Look up savingforcollege.com to find out about the best programs available to you. Freezing your child's college costs at today's prices by investing in a plan today, is a pretty good idea. Try getting a credit card that gives you a little help saving money for college, in kind of the way you have frequent flyer miles added each time you use your card. The Fidelity 529 College rewards American Express card, gives you 2% cashback to deposit in your 529 account. And if you find that there is a 529 program in another state that's better than the one at home, feel free to jump ship.
How about trying the UPromise College savings program? You have the UPromise MasterCard credit card for your cashback arrangement, and there are several affiliated discount card programs at all kinds of retailers too that do the same. There are some people who save as much as $10,000 in programs like this. A good way to get a good contribution when you're saving money for college, would be to ask your child's grandparents to make all the gifts they ever intend to make in contributions to the child's college fund. The key to saving money for college is starting early. You have more time this way to save; you have more time to recover from setbacks; and you gain valuable peace of mind.
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