Your child’s education is one of the most important things to you as a parent, and that means that you should start planning as soon as you can. College can be expensive, so seeking the help of a financial planner in Tucson can give you the information you need to begin saving in the most efficient way possible. When you save the right way, you can make the most of your investments and have the peace of mind of knowing your child will be able to get a great education. Read on to learn common mistakes to avoid when you are saving for college.
Starting Too Late
The most important thing to do when you are thinking about saving for your child’s college is to start early. In fact, it’s never too early to start. The earlier you start putting money away, the more time there is for that money to grow. By starting to save early, you can help your child by reducing or even eliminating the need for them to take out student loans when they are ready to go to college.
401(k) Loans
In an effort to provide their children with a college education, some parents choose to take out a loan against their 401(k) plan. However, in many cases, taking a loan will prevent you from getting matching funds from your company. If you leave the company or are laid off, it’s possible that you’d have to repay the loan within 60 days.
Stopping Deposits
If you are putting money into a 529 savings plan for your child’s college education, you don’t have to stop making deposits once he or she starts school. 529 plans can be used while your child is in college, and can continue to earn tax-free money. Every state has different rules about 529 plans, so be sure to talk to your financial planner about what the best course of action is for you.
Financial Directions LLC is an independent firm specializing in providing individuals and small businesses with personalized financial services. Call us at (520) 408-7777 to discuss your financial needs, and to begin saving for your child’s future.
