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Saving for college made simple

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As college tuition costs continue to rise, many families struggle to afford the education they want for their children. And many may wonder about the best way to save for college to help them ease the financial burden of higher education.

Luckily, this blog post will look at when and how to start saving and give tips on making the process easier. So stick around and learn more.

When to start saving for college?

The best time to start saving is as soon as you can. It’s never too early—or too late—to begin planning and saving for college expenses.

Generally speaking, it’s recommended that parents begin saving for college when their children are in elementary or middle school so that they have enough time to build up substantial savings. 

The earlier you start the process, the more time you have to research different ways of funding your child’s education.

How much should you save before going to college?

It is a difficult question since every family’s situation is unique and will depend on various factors such as income level, the number of children, the type of school attended (public vs. private), etc.

However, some general guidelines suggest that families save 10-20% of their annual income to cover four years of tuition costs at a public university or two years at a private university.

It’s also important to remember that there are other costs associated with college beyond tuition fees—such as textbooks and living expenses—so it’s important that families factor these costs into their planning process as well.

Additionally, numerous tax credits are available at both state and federal levels, which can help reduce the cost of college. 

Researching these options can be extremely helpful in coming up with a workable savings plan.

Six best ways to save for college

Whether you’re a parent or a student, understanding ways to save for college will help you plan and prepare for your future.

Here are the eight best ways to save for college, along with their pros and cons.

1. Investing 

Investing is a great way to build a nest egg while also taking advantage of potential growth opportunities in the stock market.

Investing in stocks and ETFs can create a sizable portfolio over time that could provide enough money to cover college costs.

Depending on when your child will start college, you may want to consider investing in more aggressive funds if you have multiple years before paying tuition.


  • Earn interest;
  • You can remove your money at any time.


  • The downside of investing is that risks are involved, and the returns are not guaranteed;
  • Investing requires studying and emotional intelligence.

2. Education Savings Account (ESA) 

An Education Savings Account (ESA) allows parents and students to save money tax-free, specifically for education expenses such as tuition, room & board, books, and other fees associated with attending college.


  • Any money withdrawn from an ESA account can be used tax-free if the money is used for qualified education expenses;
  • There are investment options.


  • ESAs have contribution limits: only $2,000 per year can be contributed to an ESA account per child;
  • Contributions to a beneficiary’s account must be completed before their 18th birthday; the funds can only remain available until they reach 30 years of age.

3. Student credit cards

Student credit cards can help you save for college in a few ways. First, student credit cards typically have low-interest rates, so you’ll save on interest payments over time.

Second, many student credit cards come with rewards programs that offer cash back or points for every dollar you spend.

Finally, a student credit card can help you build a good credit history early on. A strong credit history will make getting approved for student loans and other types of financing easier when you need them.

So, comparing offers is important to find the best student cards for those without credit.


  • It helps build a credit score;
  • Comes with discounts;
  • Have lower interest rates.


  • Low credit limit.

4. 529 plan 

It is another type of savings plan specifically designed for education expenses such as tuition and fees related to college or trade school. Like ESAs, 529 plans also offer tax advantages.

Any contributions made into a 529 plan are typically invested in mutual funds or other investments that grow over time without being taxed until they are withdrawn from the account (as long as they are towards qualified educational expenses).


  •  529 plans offer more flexibility than ESAs because the contribution limit can reach $300,000 ( depending on the state);
  • Income level and age are rarely factors in determining eligibility for benefits;
  • Tax-free.


  • There are some restrictions to transferring funds from one child to another.

5. UTMA/UGMA Accounts 

UTMA/UGMA accounts allow parents or guardians to set aside assets in trust accounts specifically designated for minors under 18 years old (UTMA stands for Uniform Transfers To Minors Act, while UGMA stands for Uniform Gifts To Minors Act).

These accounts allow parents or guardians to make contributions on behalf of their minor children until they reach adulthood when they take control of the assets within their accounts (typically between 18-21 years old, depending on state laws).


  • Earnings taxes have lower rates than normal income taxes.


  • These accounts are not restricted to education so the beneficiary can use the money for other means;
  • Contributors can’t change the beneficiary.

6. Mutual Funds 

Mutual funds offer investors the opportunity to diversify their portfolios by combining contributions from multiple sources and investing them in an array of assets, including stocks, bonds, and other securities.

They are managed by professional fund managers who use their expertise to select investments to achieve long-term growth.


  • Diversification—since they invest in multiple different securities at once;
  • Safety- due to the fact that they are professionally managed;
  • There aren’t limits to investing;
  • The funds can be spent on anything.


  • Earnings are limited to annual income taxes;
  • Fees can be high, making them less suitable for those with limited resources;
  • Parents’ mutual funds can affect financial aid eligibility.

So there you have it! Six great ways to start saving for college. It’s never too early (or late) to start saving, so if you haven’t started yet, now is the time!

Alexia Hope

Alexia is the author at Research Snipers covering all technology news including Google, Apple, Android, Xiaomi, Huawei, Samsung News, and More.

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