By Jeana Lee Tahnk
Having kids is a major financial commitment. There are the daily
necessities such as food, clothes and shelter, of course, but longer
term, all the activities, lessons and (gulp!) college tuition can be a
Not to add more fear to the equation, but Mass Mutual
estimates the cost of a college education to increase by 6 percent
annually. That means tuition for a private college for the 2022-2023
school year will be about $76,333. For one year. Double gulp!
Now before you go into panic mode and swear off any more children,
there are lots of things you can do as a new parent (or even before
those kids come) to start preparing. It's never too early to start.
The first thing we did was set up a 529 account
after the birth of each of our kids. A 529 is a savings plan meant
specifically for higher education purposes and offers certain tax breaks
that other savings plans don't. We set up ours through our bank, so
it's worth inquiring at your financial institution if one is offered.
The key to the 529, in my opinion, is putting money into the
account as you would a 401k. Regularly and as much as you can afford to
put aside. Even if it's $50 a month, every little bit helps.
Another way to start padding that financial nest egg is to ask
family members to contribute to your kids' college fund. Grandparents in
particular tend to be generous with grandkids, so you can request that
instead of getting them expensive toys that your kids will lose interest
in or clothes they'll soon outgrow, a savings bond or 529 contribution
would be a much more valuable-and valued-gift.
If you decide to sell any of your baby items, such as that crib your
baby no longer needs (sniff), strollers or other gear, specifically put
that money aside and tuck it away into the account. $100 may not seem
like a lot, but any contribution here and there, plus interest over the
years, will add up.
Save, save, save is the name of the game when it comes to your kid's
college education. If all else fails, pray for a scholarship.
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