It’s probably easier said than done, but one of the best ways to save money on college is to use more of what you or your family have in savings, and less in loans. That’s because the added interest you pay on loans will make them cost much more in the long run.
But if you or your family haven’t saved up enough to pay for four years of college, that’s pretty normal. College is expensive and many families plan to send more than one of their kids to college, so the money needs to stretch. There are, however, some places families sometimes overlook when it comes to savings.
Check all your accounts
Sometimes people wind up using one bank account so much, they forget they have others. Families should make sure they’ve looked at all the following:
- Bank accounts
- Investment accounts
- Inheritances and trusts
- Certificates of deposits
- Savings bonds
Note: We do not recommend taking money out of retirement accounts to pay for college. You don’t want to sacrifice one person’s future to fund someone else’s.
Find out if others have invested in your education
Some students are lucky enough to have family or friends who put aside money for their education a while ago. A good example would be a grandparent who started a 529 account for their grandchild.
A 529 account is an investment designed to let people save money for a beneficiary's education expenses. The money in a 529 grows faster than in a regular savings account, because no taxes have to be paid on the earnings. And when the money is taken out, provided all the rules have been followed, no taxes have to be paid on that money, either. If you’d like to learn more about it, just click here.
Sometimes people will give savings bonds when a child is born or for other big events in that person’s life. If your family has a safe deposit box, it’s a good idea to look through that, too.
If you are lucky enough to have family or friends who put aside money to help you, be extra sure to thank them! They could have used this money to buy themselves something nice, but they are giving it to you, instead.
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