Starting and growing a college savings account is a great way to make higher education possible later on in a young person's life. Many families encourage children to save their change and put a portion of their paycheck toward college funds, and this will not only help save for their time at a university but also help them develop a sense of financial responsibility. Banks can help make any and all efforts toward a college education possible by offering savings management advice. They can also provide technology such as a self-service coin machine to help members count change and put it toward their future. All of the assistance that goes into planning the finances of a college education will pay off in the long run for families and banks.
Keeping a college fund throughout life is not always easy, though, as families might come into hard times and have to use the money for other, more immediate uses. Plus, kids might not understand the importance of the fund and want to spend the money elsewhere. Here are a few tips that banks and credit unions can communicate to their customers managing a college savings account:
1. Starting early is key
CNN Money pointed out that it's always a good idea to start saving early. If families are only able to put away small amounts at a time, starting as early as possible will lead to solid savings when kids reach the college age.
2. Don't forget about loans
While savings are meant to cancel out loan options, funds won't always cover the full cost and loans can help with small amounts if necessary. This will allow for a significant amount of savings, even if it doesn't cover every college cost.
3. Focus on savings, not account performance
U.S. News and World Report said it's often a myth that parents have to closely watch the performance of any college savings accounts. While it is smart to invest that money for future profits, it's more important to focus on the saving over the gain.
4. Research the pros and cons of investing college savings
Some college savings options include investing in the stock market and others simply involve stowing away cash. Both have their pros and cons, and it's important for families to understand what opportunities lie ahead for their children's future education.
September 27, 2013