‘Guide on saving for your child’s higher education’

Saving for your child’s university education is a smart financial move that requires careful planning and dedication. With tuition costs on the rise, it’s crucial to start saving early to ensure your child has the necessary funds to pursue higher education without being burdened by student loans.

One way to save for your child’s university education is to open a 529 savings plan. This tax-advantaged investment account allows your money to grow over time and can be used for qualified educational expenses. By contributing regularly to a 529 plan, you can build a substantial fund to cover tuition, books, and other college costs.

Another option is to set up a custodial account, such as a Uniform Gift to Minors Act (UGMA) or Uniform Transfer to Minors Act (UTMA) account. These accounts allow you to save and invest on behalf of your child, with the assets belonging to them once they reach a certain age. While custodial accounts do not offer the same tax benefits as a 529 plan, they provide flexibility in how the funds are used.

In addition to these savings vehicles, parents can also consider setting up a separate savings account specifically for their child’s education. By regularly depositing money into this account, you can gradually build a nest egg to help cover the cost of college.

No matter which saving method you choose, the key is to start early and be consistent with your contributions. By prioritizing your child’s education and taking proactive steps to save, you can help set them up for success without the heavy burden of student debt.