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Cómo Ahorrar para la Universidad

How to Save for College 

By Kevin Lohry

A college education has different meanings for everyone. It is a lifelong dream for some students. For others, it is the beginning of personal independence and maturity. Whatever the meaning, given the growth of technology and resources in the world today, it is becoming more and more necessary to be equipped with a college education.

As we know, college is also very expensive. So how can a student do their part in paying off the high cost of tuition? In this article, we will show how a student can earn money, save money, and maintain a disciplined schedule in order to make the college dream a reality.

Establish financial goals

If you really believe that college is in your future, then it is essential that you begin to save money immediately. Saving now will save you the stress of paying off student loans or depending on family members and scholarships to pay for your tuition. Although college is expensive, it is important to realize that it is an investment that can bring you more employment opportunities and personal success. Whether you are in middle school or high school, you should begin to think about your college education. Here are some guidelines to get you started in the right direction:

  • What kind of college do you want to go to? Do you want to go the state college where your friends go? Would you like to stay close to home and attend a community college? Or do you have your eyes set on a private college? Answering these questions will give you an approximate number about how much your college education will cost, and ultimately how much you need to save to make it happen.
  • Earn some money! - Before you can start saving, you need a source of income. Whether it is a full time job or getting an allowance, you need some cash flow before you can save anything.
  • Set up a savings plan - Now that you have a goal of which college you may want to attend, you can set up a saving schedule in order to achieve it. There are many different strategies on saving money. A credit union has plenty of valuable information about saving strategies. They have many different types of savings accounts, and can help you organize your financial goals depending on your desired college, age, and income.

How to attain extra money

There are several ways you can earn money or cut back on expenses in order to achieve your savings goals.

  • Get a job! - Most states allow children to work by the age of 16. This is the best way for kids to start earning a consistent income that they can invest in their college education. But remember; don't let it interfere with school, because that is why you are saving in the first place!
  • Allowance/small jobs - If you do get an allowance, don't spend it all as soon as you get it, put some of it away. Also, small and easy jobs can be done around the neighborhood for a little extra cash. Offer to mow lawns, shovel driveways, or walk people's dogs for some excess revenue.
  • Cut back on needless expenses - Entertainment, eating out, and shopping are some of the best ways to soak up a prospective college student's funds. Do you really need that new pair of shoes? Or that new movie on DVD? When saving appropriately, it is important to separate the difference between what you want and what you need.
  • Apply for as many scholarships as possible - There are millions of scholarships available across the nation, so apply for as many as possible. Applying for scholarships can be laborious work, but think of them as a free investment towards your college education. Check out your local community for scholarship opportunities, or begin looking online on sites such as www.finaid.org/scholarships/ and http://www.scholarships.com/.   

How to save the extra money

You get it. You need to save money. But how much money should you be saving? After determining an approximate cost on your desired college, you can figure out how much money needs to be saved, every year, every month, and every week. A credit union employee can help advise you on how to follow through with these incremental goals. A general percentage to save for college is 33% of what you earn. You can do this by reserving a certain amount of each paycheck specifically for college savings. By saving just $10 a week for a year, you will save over $520! Credit unions offer several different options for saving money:

  • Savings Account - These accounts are the most common way to save money. Savings accounts pay interest on the money in the account and they cannot be used directly for money (writing a check, using a debit card, etc.).
  • CDs (Certificates of Deposit) - CDs are similar to savings accounts because they are insured and virtually risk-free. The difference is that a CD has a fixed term and a fixed interest rate, and the money can be withdrawn when the term has ended.
  • Educational IRAs - This IRA is a savings arrangement whose contributions are invested in order to fund an individual's education. Also known as an ESA, these contributions are not tax-deductible, but the contributions may earn interest tax deferred until distributed.
  • 529 Plans - A 529 plan is an investment package that has tax advantages with the intention of encouraging savings for future education.

Remember, college is an investment in your future. The sooner you begin to save, the faster you will be on the track to success.

Published 5-8-2012.

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