College savings plan is a planning of saving money for your kids’ college expenses in the future. This is a very simple and common way of saving a small amount of your income every month into a savings account and after some years, when it’s the time to send your kids to college, you can use that money.
Importance of College Savings Planning:
In the present economy when most people work in private sectors and often they have to work on more than one job in order to provide for their family and it seems a serious problem that when there is no saving, how will they manage to send their kids to college after some years. Just like an insurance policy that doesn’t benefit right at the moment but it has future advantages, college savings plan also have benefits for future. You can start saving a small amount of your monthly income in your kid’s college fund and by the time they reach the age to enter in a college, you can retrieve your saving and provide a good college education to your kids.
When there are limited resources of income, it seems like a big problem to provide for the family, make daily expenses and still save money for future needs of your kids but with college savings plan, you can easily manage to save some money every month and that little portion will make up a huge amount of money after some years. The key behind saving money for college through this plan is to cut expenses from the less important aspects in your life. For example, you can save some money if you don’t order fast food every time you don’t want to prepare food or you can rent fewer movies every week in order to save that money. These are just some random ideas and if you carefully take a look at your expenses, you can easily find up to $500 a month expenses that are not that important and you can cut short on them.
Here is preview of a Free Sample College Savings Plan Template created using MS Word,
Here are the steps for Planning College Savings:
As we have discussed above that this saving process doesn’t mean you will earn any extra money every month but the key behind using it is to save money from the irrelevant or less important expenses that you make in routine life. You can start by keeping a log of your regular daily expenses for an entire month and at the end, you need to review the log carefully. Here you will find all of your monthly expenses i.e. grocery shopping, clothing items, shoes, utility bills, maintenance expenses, house rent, vehicle gas expenses, party expenses for kids or your friends and much more.
After reviewing the log, you need to take out the most important elements that you have to pay for every month i.e. house rent, grocery shopping, utility bills etc. This way, you can put these elements aside and now it is time to review the remaining items. Here you need to take the least important stuff from the list and put it on another sheet of paper. These are the elements or items that you can cut short on and save a fortune for your kid’s college expenses.