Where to get money for college
The plight and turmoil of the U.S. economy has caused me to think about our children’s’ future. It’s scary right now to try to even comprehend what it will be like. If you once thought you’d borrow funding for college that could be out. Maybe you were planning on using your retirement funds—at least some of them. Perhaps that’s no longer a good solution either. Thinking about selling your kidney?
If none of these alternatives seem like viable options, and I really hope you weren’t seriously thinking about that kidney thing, then you might want to investigate starting a Tax-advantaged college savings account. Basically this is a savings account you open at a bank, credit union, or any financial institution that provides principal security but pays a low interest rate. Typically these accounts limit the number of transactions you can have before your institution charges a fee.
Another option (one that provides higher interest but has no guarantee of principal) is a money market mutual fund. This might be a more attractive savings option because while both a savings account and a money market mutual fund let you access your money quickly, with the later, you actually have an investment vehicle and the returns you receive are based on federal interest rates.
Rande Spiegelman, Vice President of Financial Planning at Charles Schwab does a good job summing up the cost of college tuition and gives a comparison between financial aid and a savings plan. After reading his discussion read about federal tax education incentives here. Then use this online analyzer to help you figure whether your savings or financial aid package is enough to cover your cost of attendance.
I’m going to continue to explore education funding options. As I find information and make sense of it, I’ll present it here. However if any of you can offer up tips about what has worked well for you or if you can tell me about any resources that have been particularly helpful to you, please share by sending them to me at Donny-at-Invesmint-dot-come.
For now I’m going to leave you with a few books my friends recommended (click the image to find out for more information).
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Tags: funding for college, money for college
This entry was posted on Sunday, October 19, 2008 at 1:20 pm and is filed under Financial Education. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
2 Responses to “Where to get money for college”
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FixThePig Says:
Nice article. It is pretty scary when you think about how expensive college currently is, not to mention what it will look like in the next 10 years!
It’s important that you meet with a financial adviser and discuss options…you might want to ask about 529 college savings plan; don’t forget about a ROTH IRA for you kids either! -
admin Says:
yes, these are some very good ideas. Most people don’t realize the importance of investing in their children’s future and also their own. Especially in this tough job economy you must pursue a college degree and even a masters to separate yourself from the rest. By investing in these funds at an early age will give you the opportunity to pay for college and also build up equity for your child’s future.
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