College is the gateway to the professional world. Your child will need to go through it to be equipped with the right skills and knowledge. However, quality college education comes at a significant cost, especially if you plan to enroll your child in a private institution or a prestigious public university. There’s no better time to start saving for your child’s college education than now. If you want to face fewer headaches and still have enough money for other household projects, then follow these tips:
- Use your home equity
If you have seen your home equity rise over the past two years, you can add that extra value to your child’s college fund. To do this, you can simply take out a home equity loan. The interest rate is fixed throughout the life of the loan and you can use the money immediately once you are approved. However, these benefits come with the risk of losing your home if you fall behind your repayment schedules. To be sure, talk to a financial expert before taking out a home equity loan for college expenses.
- Open up a Registered Education Savings Plan (RESP)
Most parents would consider opening up an educational savings plan that allows them to invest in their children’s college education little by little. In most cases, educational savings plans are tax-deferred so you can withdraw funds tax-free once your child is ready to enroll. You only need to look for an institution that guarantees maximum flexibility to families. If you live in Canada, you can look into opening a CST RESP which offers a personalized service that matches your financial needs and your child’s educational goals.
- Look for new income sources
In this economy, you can’t rely on a single income source to build your child’s college education fund. You should also seek out additional income streams such as bonds and stocks. In addition, you can also apply for a life insurance policy that includes an educational savings component. If you have enough capital on hand, you might want to open an online business. Considering the cost of getting your child through college, you need multiple income sources to help you accomplish your goal.
- Downsize your lifestyle
Oftentimes, you may need to pay less on luxuries so you can reserve more money for your child’s college fund. If you are subscribed to multiple streaming services, you can keep one and cancel the others. You can also avoid eating out and, instead, cook meals at home. These simple adjustments can help you maximize your budget and give your child the necessary resources.
- Apply for a scholarship
If your child is a top performer in high school, they have a better chance of qualifying for university scholarships. These are reserved for promising students and the perks go beyond tuition discounts. Some scholarships also offer free lodging, meal allowances, and book stipends.
Giving your child a college education is part of your responsibility as a parent no matter how costly, but it shouldn’t put your finances at risk. Follow these tips and provide your child with the preparation they need as they face a new chapter in their life.