As a parent, you dream of your child going to college, achieving great feats, and becoming a useful and productive member of society. However, tuition seems to rise with every year, leaving their bright future potentially dimmed by debt. Therefore, consider talking to a financial services provider about college savings strategies early on to help prepare for your son's or daughter's enrollment. Here are a few of the plans available.

Ways to Save For Your Child’s Tuition

1. The 529 Plan

These are dedicated college savings plans issued and managed by each state, allowing you to contribute money as you see fit. The funds are then invested and grow on their own, helping you get more for each dollar put in. The earnings on the account are often tax-free. However, your contributions are made on an after-tax basis. Talk to a financial services provider about strategies for funding this plan.

2. Coverdell Education Savings Accounts

Coverdell accounts are ideal for parents struggling to put a lot of money aside for college each year. These plans have an annual contribution limit of $2000, but this amount can come from multiple sources. If you have children who are still young, this allows you to build up their college fund over an extended period.

3. Standard Savings Accounts

A standard savings account can also be used to manage college savings. Many banks offer a small amount of interest on the funds, helping your money make money over time. Once your child turns 18, they can take over the account and use the money to cover their education expenses. Keep in mind, this method does not contain tax benefits, but it can be used in conjunction with other plans to maximize college savings. A financial services provider will be able to help you determine which other plans fit with your strategy.

Ready to start saving for your child’s college tuition? Contact Wilson, Rea, Beckel & Associates CPA's LLC serving Pagosa Springs, CO, and the surrounding area. As an experienced financial services provider, they’ve helped residents and business owners alike manage their accounting needs for more than 16 years. Learn more about their services online or call (970) 731-1040 to schedule a consultation with an experienced CPA.