I have been down the road before – saving for college is tough! You have so many things that you want to buy and so many things that you want to do. Typically, saving money for something so far down the road (even though the time really does fly by) is put on the back burner. Parents say that they have 18 years and are not worried about it, but in a blink of an eye, those 18 years go by and they hardly have anything saved. If you want to start saving now, here are a few creative ways to save for college that I have learned as my time as a mom and grandma:
Make Them Earn Their Tuition
Instead of paying someone to cut your lawn and clean your home, use your children or grandchildren instead and then pay them. Ideally, you can put this money towards their college tuition, but the tricky part about this is teaching them that they are doing work now for benefits later, and that can be hard to explain to little ones. If you have chores that you would pay someone else to do, see if your children or grandchildren would want to do it instead.
Sell Unused Items
Depending on your items that you have to sell, you might be able to make some pretty significant cash for your items. Even if you do not have a ton of valuables, the money that you make from your items will definitely add up. For example, if you have some old jewelry that you never use, you can sell jewelry in Atlanta, GA at Chapes-JPL. They are lenders and buyers of valuables in Atlanta with one simple goal: to provide affordable asset loans on jewelry, gold, diamonds, watches, and other valuable assets, at a low rate and at a fair value. Chapes-JPL buys jewelry and other valuables and also offer loans as low as $100 and as high as $5 million at some of the best interest rates in private financial offices. They say that they have built their reputation on trust and security, experience, giving cash fast, discreet and confidential services, and very low rates. Selling your valuables, or getting a collateral loan from Chapes-JPL could be a fantastic way to save up money for college!
Start A Side Hustle
Now more than ever before, there are so many ways to earn extra money by starting a side hustle or two. For example, you could buy homes and use them as rentals to make some extra cash (hopefully). Rental properties can help cover your child’s or grandchild’s costs in many ways. They are not only income generating investments, but real estate also tends to appreciate over time, even if you go through a drop in the market for a year or two, and they are great to either sell later on, or take money out from your built up equity later on if you do not want to sell. Do keep in mind that rental properties are not passive investments like equities or bonds. They do require quite a bit of work, especially if you end up with a bad tenant, or if you have an older property.
A 529 plan is a college savings plan that offers tax and financial aid benefits. Thankfully, it is not limited to just college – you can also use the funds to pay for K-12 tuition, as well, in addition to college costs. The 529 College Saving Plans work similar to a Roth 401k or Roth IRA. You invest your after-tax contributions into a mutual fund or similar investment and your account will go up or down in value based on the performance of the investment options. The only caveat to a 529 savings plan is if the beneficiary does not use the funds for college or school, you might be subject to penalties when you withdraw your funds (with a few exceptions in place). Not only can you use this fund to pay for tuition, but it can cover rent and books, as well.
Buy Prepaid Tuition
This is something that I didn’t even know existed but according to Money Crashers, many states offer a prepaid tuition option in their 529 plans. Instead of a savings and investment account, you pay the state a preset amount when your child is young, and the state locks in your child’s tuition costs. The idea is that the state invests the money, and the returns cover the growing cost of tuition over time. That’s great in theory, but it comes with some tricky caveats.
First, what happens if your child doesn’t want to go to college in that state? That nearly happened in my family. My parents invested in prepaid tuition for my sister, but in her teens, she started making noise about how she wanted to go to school out-of-state. My parents bribed her by offering her their old car if she stayed in-state – a deal she accepted.
States do have rules in place for this, most commonly that the student will owe the difference in tuition costs if they attend school out-of-state. But a more disastrous scenario could strike if the state’s fund doesn’t perform well enough to cover your child’s tuition costs. In the fine print, most states include clauses that there are no guarantees for your prepaid tuition. If the market crashes, you could be left with a worthless piece of paper and an indifferent state government. While it’s not likely, it’s a risk to research before buying into any state’s prepaid program.
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I’m a Gramma to a beautiful, funny, smart little girl who was born in July of 2014. She’s the joy of my family and I’m so very proud to be a gramma (an alternate spelling for grandma)! I am a coffee, music, movie and outdoor lover! My family and I love picnics, festivals and concerts. Spending time with my family is the best part of my life. I love my job as well! Blogging and product reviewing has given my family and I a lot and I have also learned a lot and made a lot of friends.