By: Kristi Krebs, Deposit Operations Manager/Officer, Fargo branches
First International Bank & Trust, Member FDIC
Whether you’re bringing your newborn home from the hospital or sending your teenager to high school, it’s never too late to start and build college savings plans for your kids. Very few young people will receive full college scholarships (even those who do have additional school-related expenses), so help your star athletes and arts protégés, but also be realistic and start college savings plans.
Saving for college is like parenting. It can seem overwhelming, yet three guiding principles and reliable plans can help.
Consistency and Discipline
When you start a college savings plan, keep contributing funds, even a little at a time. Just as consistent rules help in raising kids, steady additions to any bank account can really add up to success. Even as the expenses of your family increase, use discipline to keep the college savings plans growing.
Most college savings plans don’t offer high interest rates, but they also don’t offer high risks. Start contributing early, and your patience will be rewarded as you see the balance grow, slowly but surely.
Have a plan, but be open to new options. This serves parents well every step of the way, and it’s a good guide for college savings plans, too. One of our bankers would be happy to help you look for the best options to start, continue and expand accounts that will help your future college students. Meanwhile, here are a few tips:
When to start
Again, as with other parenting principles, start early! A child with a social security number can have a savings account.
How to start
Our most popular college savings plans account is our Higher Learning Fund, which is basically a certificate of deposit (CD) designed especially for the student(s) in your family. It is an excellent way to save for college or other higher learning expenses.
You can start a higher learning fund account at any time, and can contribute any amount at any time. Many people use direct deposit and some even mention it to grandparents, godparents and others who are looking to help a youngster with his or her college expenses. A deposit from grandma on each birthday will really add up.
This account matures in July after the young person turns age 18. That’s typically right after he or she graduates from high school, so it’s ideal timing to use the funds—in whole or in part—for higher learning expenses. Since this account runs under the child’s social security number, there can also be some tax advantages – although you should always discuss your tax planning with a tax professional.
How else to start
At any stage, detailed information and a student loan calculator can give you personalized direction on college savings plans, based on how much time you have to save, what you can contribute, and what type of higher learning you anticipate for your future students.
Kristi grew up in the Fargo area and earned her degrees in business administration and marketing from Minnesota State University Moorhead. She and her husband, a native of New England, N.D., are building a home in West Fargo, so they plan to be active members of the community for some time to come.