If you’re a parent looking for a college savings calculator to help plan your family’s education funding, you should be thinking about 529 plans.
A 529 plan allows you to save for future college expenses. You can start saving at any time and build up funds as your child grows. You can use a college savings calculator to figure out how much to save when funding your 529 plan.
These plans carry certain advantages (earnings from a 529 are not taxed by the federal government) and obligations (there are restrictions on what the funds can be used for).
Find out more about 529 plans from the SEC’s An Introduction to 529 Plans.
Studies have shown that families who establish a 529 plan save much more successfully than those who do not. As student loan debt continues to plague graduates who find the job market anemic, it’s wise to save for college expenses in advance rather than borrowing to pay for college and then entering adulthood burdened by massive debt.
Anything you can do to reduce the amount your children must borrow to pay for college is important. To see how our own thinking has evolved on student loan borrowing, read our article “Is Student Loan Debt Still ‘Good’ Debt?
If you’re in the planning stages of paying for college and you want to use a college savings calculator, that’s good; combine the planning assistance you get from using a college savings calculator with the advantages of a 529 plan, you should be able to set your children up for financial success as they pay for their college education.
If you’re already burdened by student loan debt, talk to one of our certified consumer credit counselors. With careful budgeting and reducing/paying down your other debts (like credit cards) we can help make your student loan payments easier to bear.