Some families are organized and fortunate enough to have the ability to put money aside for a college education. However, many simply are not and that is ok too. There are some different savings accounts available at your bank and other institutions that can help you afford your education. The earlier you start in high school to estimate the amount your post-secondary education will cost the sooner you can start planning. There may be summer jobs, part-time evening and weekend jobs and the chance to make, build, fix or sell items between now and your graduation. Some people ask grandparents and family members to skip the birthday and Christmas presents and to put any money they would have used into their education savings instead.
It is easy to become overwhelmed at the seemingly giant price tag associated with your future; however, there are many routes to take. The reality is most college and university students engage in some form of financial aid. Learn more about different savings options below:
These specific bank accounts are different from your daily chequing account. They are designed to grow your money and not to be accessed for debiting or withdrawals. They provide two ways to allow your funds to grow. First, the interest is higher on savings accounts and will grow on the money that has been deposited. Next, the interest you make on these savings accounts isn’t taxed. This is different compared to a typical interest-earning savings account. These differences allow you to maximize your funds.
Tax-Free Qualified Tuition Programs aka 529 Plans
These are tax-free qualified tuition programs available to help you save up for college. There are two kinds of 529 savings plans to choose from:
Prepaid College Tuition Plans
Higher education schools or states can manage the prepaid college tuition plans. They enable your family to lock in today’s prices and prepay your education. This is beneficial as the cost of attending college regularly increases. This is a great option to maximize your funding.
College Savings Plan
There are state-managed plans available that allow you some flexibility regarding how the state invests your cash. Also, you can earn interest on the investment. Money can be withdrawn from these plans to pay for any kind of college expenses.
ESA or Coverdell Education Savings Account
Coverdell Education Savings Accounts (ESAs) — formerly called Education IRAs — offer another good way to save money for education expenses. Here are some details about these accounts:
Coverdell Education Savings Accounts used to be known as IRAs. They offer a positive way to save up for college costs. One of the benefits of these accounts are that they can be opened as soon as a person is born. The limits for 2011 and 2012 stated that you can contribute up to $2000 every year. The money in ESAs generates tax-free interest. Every ESA is only for one student to utilize; however, each family may have multiple ESAs. This fund can be used to pay for any school costs from elementary, high school, or college education.
Speak With Your Family
College is a conversation that is worth having with your family members. Sharing your plans can help you achieve your goals. Maybe you trade-in traditional birthday presents and Christmas gifts for a deposit to your 529 Plan. Perhaps, your family member has a business that could hire you for a job? You will have more options if you brainstorm together. Ask loved ones what kinds of things they did to pay for college and how they saved up when they were your age. You might decide that having the latest cell phone or newest laptop isn’t as big of a priority anymore once you look at the big picture.
Save From Your Part-time Job
Part-time jobs or full-time hours in the summer months can add up. Whether you work online from home, start selling your cookies or handmade jewelry or find a more traditional job at a restaurant or office, the possibilities are everywhere. Look at local job boards for inspiration. Offer to mow your neighbors’ lawns or shovel their driveways. Start a house-cleaning service in your neighborhood…or approach family, friends and elderly neighbors who know you and trust you. Put fliers up on your mailbox advertising your services.
Maybe you can offer some tutoring help or babysitting services? Perhaps, you love building and painting birdhouses or custom mailboxes or house numbers? Maybe you see someone always trying to complete yard chores and can offer to remove branches or do dump runs? There are many options if you can think about what you enjoy doing and how much time you have to commit.
Apply for Numerous Scholarships and Grants
It can be easy to become discouraged if you hand out a zillion resumes and don’t get any interviews. It can be equally difficult to spend all your free time at work during the last few summers instead of hanging out with your friends. If the numbers of what you have been able to save are still not adding up and you are having nightmares about financial aid, take a deep breath, you are not alone. Thankfully, this is a great time to look into local and state scholarship options.
Speak with your school counselor and ask your family and friends. Many scholarships are offered by employers and your folks, or your relatives may work for a company that offers something. The more time and effort you put into seeking out scholarships and grants you are eligible for, the better chance you have for cashing in on some free money towards your education. If writing essays isn’t your thing, break it down into a more manageable task. Speak with your English teacher to get some tips. Practice your outline and writing skills and ask if your teacher will proofread, edit and provide feedback.
Going into some debt now to secure the job and career of your dreams is the reality that many of your peers are facing. It would be lovely to attend college, earn your degree and be debt-free and start a job in your field immediately after graduation. However, this isn’t the case for most people, and it is important to stay positive and focused. Learning how to budget now will benefit you in the future. If you haven’t thrift shopped before for clothes, shoes and household items, now is a great time to start. If you have your reading list for next semester, try to secure second-hand textbooks. Recycling can not only help save the planet, but it can also drastically impact your pocketbook in a great way. It is essential to remember that chances are, thousands of other students are feeling the same frustrations and struggles as you. Be sure to speak with your guidance counselor, family, or friends if you begin to feel overwhelmed.
Create Healthy Coping Mechanisms
Between finishing high school, watching your grades, making it to your sports and work commitments, dealing with family issues and financial obstacles and preparing to possibly move cities and start college, A LOT is going on. Give yourself some credit for how far you have come. Recognize your stress triggers and be aware. Watch if you find yourself sleeping all the time or not sleeping at all. Notice if you are scarfing down pop and fast food and can’t seem to eat enough sugar or if you are the opposite and reaching for salty snacks instead.
The more you look at your coping mechanisms, the better you will be able to establish healthy habits. If you go shopping for shoes every time you feel stressed, you will soon be lamenting about your bank account. If you reach for fast food, you will become dissatisfied with your waistline.
There will be stress in your life between now and college graduation. Whether it is family life or not being able to afford to fly or drive home on holidays, financial issues, grades, teacher drama and friends who just want to party, things are going to come up. You want to have healthy outlets to vent your emotions so that you can stay physically and mentally healthy yourself. Missing a ton of classes due to illness will only generate more stress.
Hit the campus gym, start jogging, find a stand-up comedy club, join a study group, take a hot bubble bath, do squats and push-ups, go dancing, explore your city on public transport, try a new recipe…there are many fun and exciting ways you can blow off steam that doesn’t involve drugs, alcohol or expensive nights out.