With the expense of high education levels like colleges and universities, it is important to understand that there are financial options out there available to you and your children. Children deserve a well-thought fore plan from their parents to account for the education – and fortunately, you are not out of options when it comes to planning for your child’s future.
Most parents open a simple interest-bearing education savings account before their kid hits 18. A simple contribution per year for the majority of the child’s early life can make the difference when it comes to paying university bills, especially if you encourage other family members like the grandparents to give a constant contribution as well. You need not worry about high taxes imposed on your educational saving account because the government will not touch your funds, so long as they are used for educational purposes only.
It is important to know that educational expenses are things like fees, school books, tuition, school supplies, and other things of this nature. You will find that once you have paid all these expenses, there will be some money still left. You can simply turn the entirety of these funds over the child until they get to 30 years, which they can use to cover other additional expenses, although they will be required to pay taxes on this money. However, if you have other children, you can use the leftover money to pay for their college fees as well.
Although you need not pay taxes on an educational fund, it isn’t charity either, and therefore is not tax deductible. However, the savings you grant your child is an invaluable asset, presenting them with a variety of options which will make their life easier as college quickly approaches, especially if you can maintain $1000-$2000 annually. If your kid can get a scholarship, then the education savings account can act as a great graduation present.
With simple contributions of your paycheck yearly and other programs that are aimed at assisting your child, you can be able to guarantee your child the higher education for posterity. With the rise of tuition costs, there is a reason not to capitalise and prepare early. To benefit from this, be sure to alert your close family and friends, reminding them that the best birthday and Christmas presents are a simple contribution to the educational savings account. The kid may not immediately appreciate it, as they want to spend money on toys and video games, but when they are 18 years of age and find themselves stripped of cash for their college studies, the savings account will be of much help.