Planning a Great Future for Your Kids: How to Save for College Today
Do you have a child you want to send to college? Saving for college, even if it’s not for your own child, can be a big responsibility. It is something that should start while the child is young so it doesn’t become too big of a burden several years down the road.
Here are a few tips to help make saving money for college a little easier:
1. Start Early. It’s no secret that college comes right after high school, so it is an expense that can be planned for well in advance. Many people start saving for college soon after a child is born. The earlier you start the better.
2. Open a Tax-Free Account. If you know you will be able to contribute monthly to a college fund, open a tax-free 529 college savings account. Any interest is tax free. In addition, any money you withdraw for school expenses, such textbooks or tuition, will not be charged a penalty. The only requirement for this type of account is a monthly deposit. This can be as low as $50 a month.
3. Open a UPromise Account. This is a painless and free way to save to save for college. Sign up for a UPromise account and receive cash back on many purchases, including online shopping, restaurants, and even trips to your local grocery store. You simply register one or more credit cards with the program and when you use that credit card on qualifying purchases, they credit a percentage of your purchase to your child’s college account.
4. Ask for the Gift that Keeps on Giving. Do relatives and frienda constantly ask what to get your child for birthdays and Christmas? If so, why not ask them to put some money towards the child’s college education? Not many people will turn their nose up at that worthy contribution. This money can add up quickly and can earn interest or other benefits over time, which make it go even further.
5. Pre-Pay When You Can. Some states, like Nebraska, offer residents an education trust account. You must have an initial deposit and make minimum monthly deposits (like the 529 account), but the interest is tax free and you are able to use the money at any state college or university. You also get to lock in the current tuition rate when you sign up. That alone can save you thousands of dollars!
6. Make Targeted Investments. In line with a savings account for college, you can also make targeted investments. This is best done with expert help from an investment firm or a bank. Investments will frequently pay higher interest rates than a savings account. Just periodically place money into the investment fund and watch them multiply over the years. If done early enough and with frequent contributions, the amount can be sizeable once college comes around.
The key to saving money for college is to start saving early and as wisely as possible. With enough future planning and regular contributions to the college fund, there should be a fairly large amount of money readily available when college looms on the horizon of your high school student in the coming years.
How to Rebuild Your Credit
Good credit is invaluable today. When your credit score has taken a hit, it can seem impossible to ever repair it to a decent level. Starting to rebuild your credit is often the hardest part. Once you’ve started the process, however, momentum begins to develop and you can begin to rebuild your credit over time.
Get New Credit
It might seem contradictory when your credit is struggling to recommend getting even more credit. However, if your bad credit woes have left you without any credit cards, you need to get a few to rebuild your credit.
Consider applying for credit cards from these places:
• Gas station
• Local bank
• Department stores
• Secured credit card institutions
It’s important to note to only select a couple of places to apply for a credit card. The more applications you put other there, the lower your credit score will get. This will make it hard to get a credit card and will start a negative spiral as you try to rebuild your credit. Also, avoid any credit card companies who prey on people trying to rebuild their credit. They will charge a high interest rate and high fees for their cards.
Establish New Credit Habits
It is critically important when you try to rebuild your credit that you establish new practices. If not, you will be right back where you started but possibly with nearly irreparable credit.
When trying to rebuild your credit, you must avoid:
• Paying credit card bills late
• Not paying credit card bills at all
• Having your account sent to collections
• Defaulting on a loan
• Filing for bankruptcy
• Getting a judgment against you
• Foreclosure on your home
• Having a high balance or maxed out credit cards
Part of establishing new, beneficial credit habits should include paying your bills on time and paying well above the minimum balance. The minimum amount owed to a credit card company is not set based on how to get you out of debt. Instead, it is there to try to get you to pay off the loan over a long period of time. After all, credit card companies make their money by the interest you pay them each month you carry a balance.
Make a plan to avoid many of the pitfalls that allowed your credit to get in disrepair and avoid making the same mistakes again.
Replace Bad Credit with Good Credit
The only way to ultimately repair your credit is to show creditors over a long period of time you will be responsible with their money. There is no quick way to do this. It’s a trust that must be built over time and can’t be rushed.
Make sure you follow good credit habits. Charge only what you can afford and pay your bills on time each and every month. Also, only have a small number of credit cards you know you can easily handle. This will, over time, replace bad credit with good credit.
While it might seem impossible to rebuild a bad credit score, it can be done over time. With persistence and good credit habits getting established, you can repair bad credit. In the end, it takes time, patience, and a willingness to do things differently than before.
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