If the thought of being able to put money into savings makes you laugh hysterically, clap your hands.
If you clapped, you’re not alone. It can be incredibly difficult to put money into savings. And that’s just when the savings are your own. When you start considering how you’ll manage to save any money for your kid’s future — well, that can seem even more impossible.
If you want to save money for your kid’s future, or at least want to try, here are a few tactics to consider:
Start a 529 Plan
Like a 401k, a 529 plan is helpful, but it can be daunting if you’re new to it. The IRS has a detailed and helpful Q&A page that makes for a great introduction to this popular college savings plan.
The short and sweet explanation is this: A 529 plan allows you to save money specifically for education costs without being taxed on the account’s earnings — provided you spend those earnings on approved education costs. It’s considered your asset, so it won’t affect your kid’s financial aid and you can transfer it to their sibling if they’re not interested in pursuing higher education.