Save for College Starting with these 3 Tips
Posted On: February 19, 2024 in: Financial Education
by Park Bank
How Early is Too Early to Start Saving for College?
First things first, it’s NEVER too early to start saving for college. In fact, saving early = saving smart.
Why is it important to save early?
Well, according to educationdata.org, the average cost of college, including books, supplies, and living expenses at a four-year school is nearly $40,000 per year. That’s a lot of lawn mowing! And by the time your child graduates high school, this number is likely to go up. (To get an estimate of what college might cost by the time of graduation, visit finaid.org/calculators/.)
But don’t worry, here are three tips on how to help save for college:
Tip! To help educate and empower your child, we recommend you do the following together.
1. Set Up a Savings Plan.
Start by setting a realistic goal and save regularly by putting aside a set amount of money.
For example, let’s say you’re about to start your first year of high school and want to have $10,000 saved by the time you begin college. With a full four years to reach your goal, you’d need to save $2,500 per year which equals $208.33 per month and approximately $48.08 per week.
Another approach is setting a simple weekly savings goal. Here’s what that could look like:
- Save $10 per week = $520 saved per year.
- Save $25 per week = $1,300 saved per year.
- Save $50 per week = $2,600 saved per year.
- Save $100 per week = $5,200 saved per year.
As you can see, saving on your own really adds up!
2. Open a Savings Account that Earns Interest.
To make your money stretch further, open a savings account that earns interest.
At Park Bank, our Early Saver account allows you to earn interest on the money you deposit. The interest compounds monthly, which means you earn extra money every month. The best part? You can open the account for free and add funds whenever you’re ready!
3. Practice Smart Money Habits.
Another way to supercharge your savings is with Park Bank’s partnership with Greenlight®, the money app and debit card for kids.
With Greenlight, you can round up purchases to the next dollar and automatically add the change to your savings. You can also set up a percentage of your allowance to go towards savings or have your parents set up “Parent-Paid Interest” to reward your smart saving. If your child has a job, you can set up direct deposit, so their paycheck goes into their Greenlight account.
With your Greenlight debit card, you can enjoy features like real-time notifications, instant transfers, viewing your spending history, and secure, contactless payments with Apple Pay® and Google Pay®. Plus, there’s no minimum or maximum age requirement to open an account and Greenlight debit cards can be used almost anywhere Mastercard® is accepted.
See for yourself how Greenlight can help you and your child save.
Finally, if you ever have questions or need financial advice, don’t hesitate to reach out to our team. We’re happy to work together to get your college savings to the next level!
CTA: Parents, have questions? Reach out to get help starting your child’s savings today!
The Greenlight® prepaid card is issued by Community Federal Savings Bank, member FDIC, pursuant to license by Mastercard International.
SOURCES:
https://educationdata.org/average-cost-of-college
https://studentaid.gov/sites/default/files/saving-early.pdf