Your 2012 tax refund could be a good place to start with saving plan for a college eduction.
The Connecticut Higher Education Trust has a few ideas.
“Faced with the staggering costs of college, many people feel paralyzed and that prevents them from taking the first step,” says Treasurer Denise L. Nappier, who serves as trustee for CHET, the state’s direct-sold 529 college savings plan. “What’s important is that they start to save, even a little bit, as soon as possible. It’s never too early or too late to start and getting started is easier than most people think.”
Determine how much you need to save.
According to the College Board’s Trends in College Pricing 2012, the average cost of a four-year degree at a public college is approximately $17,860 per year. For a private college today, the cost is more than $39,518 per year. There are many tools available to help you calculate how much you need to save. Try this online calculator to create your own College Savings Planning Report.
Set a goal.
Having a goal is important so that you can track your progress. The online calculator will help you determine how much to save based on your goals. Be realistic in how much you can commit to set aside every month. Look at your expenses and see where you might be able to make cuts—a dinner out, keeping the thermostat a few degrees lower, etc. And don’t be ashamed to start small—$25 to $50 a month over time will build a nice savings cushion for college.
Make it a habit.
Save regularly. If possible, look to put money aside from every paycheck to save for college.
Open an account dedicated to college savings.
While any savings account can be used to save for college, a CHET 529 direct-sold college savings account carries many benefits for Connecticut residents. A CHET 529 account can be opened with as little as a $25 contribution and is the state’s only direct-sold 529 college savings plan. Account earnings grow Federal and Connecticut income tax-deferred until withdrawn. To learn more about opening a CHET 529 college savings plan click here.
Make it a family affair.
Encourage family members to contribute to your child’s college savings account. Contributions make great birthday, holiday and graduation gifts. The CHET 529 college savings plan makes it easy for family and friends to contribute online. To learn more about e-gifting, click here.