Savings Tips and Tools to Help You Get There
At CollegeInvest, we understand that planning for college can be a challenge. That's why we offer a variety of tips and easy-to-use tools to help you make clear, comfortable decisions regarding your savings and investment strategy.
Do your research
Check out the many tools and calculators provided by The Vanguard Group, which can help you determine the projected cost of college, your projected savings and your projected Colorado State tax deduction.
Define your savings goals
An important step in saving for college is determining how much you’d like to save. Most families calculate the projected cost of education and save toward that number. Others dedicate a percentage of their yearly income. Defining your goal helps you measure your progress and may motivate you to save more. Not every parent sets out to cover the entire cost of college, but many do. Only you know what’s right for your family and children.
Compare college savings options
There are lots of ways to save for college, but experts agree 529 savings plans are one of the best ways to save for college. Created to encourage families to save for the expense of college, 529 plans reward investors with important benefits you won’t get from other ways to save—including other investments. Check out the College Savings Options Comparison Chart to see what might work best for your family.
Start as early as possible
It’s never too early to save for college. We’ve all heard the stories—the cost of college is rising every year. While the numbers can look scary, a college education can be more affordable than you might think. Keep in mind that, according to The College Board, most families don’t pay the full sticker price for college. Most students receive some type of aid. At the same time, while help is out there, as with any long-term financial goal, time is a valuable asset. Thanks to tax-free growth and compounded earnings, a small amount invested early can really add up over time.
Take advantage of your Colorado State tax deduction
This chart shows the potential difference between saving with a taxable account, saving with a tax-free account—such as a 529 college savings account—or saving with a CollegeInvest tax-free account and reinvesting your state income tax deduction annually. The difference in savings growth can be substantial!
Save as much as you can
It’s okay if you start small; the big thing is to start. Take a look at your budget and see where you can make some cuts. If you find you can make a cut, redirect that money to your CollegeInvest 529 plan.
Save every bonus
If you should receive a lump sum of money—a bonus, an inheritance, a tax refund—don’t spend it. Sock it away in your 529.
Use automatic transfers
You can sign up to have any amount transferred from your checking or savings account into your 529 on a monthly or quarterly basis or work with your employer to have contributions deducted directly from your paycheck. Try to contribute at least once a month. Saving a little from each paycheck can be easier than depositing one lump sum at the end of the year.1
Increase the amount of money you save yearly
Try to increase your savings to the rate of tuition increases. For example, if college tuition increases at a rate of 5%, try to increase your savings contributions by 5%, too.
Let relatives and friends help
Suggest your relatives and friends give money to your child’s 529 account, instead of presents your child will soon outgrow. Let friends and family know about the great programs like Ugift and Upromise Rewards, that our partner Upromise offers, so they can easily contribute all year long. Family and friends can also use our Greeting Cards.
1A periodic investment plan does not ensure a profit or protect against a loss in declining markets. |