Parents who know the importance of financial security, they always think about the future of their kids. There is nothing more demanding than making sure that their children go to the right school. They know this will impact the future of their children. Thus, this is where the value of education funds come into play. Those who experienced recession know how challenging it is to make ends meet. We are talking about food, shelter and clothing-our basic needs. Now, securing their children’s educational fund should be their priority. You will learn the different types of institutional funds and their strengths or weaknesses below.
Education Funds-Financial Literacy
Getting your children prepared for their future education is a robust undertaking. Thus, this should happen at an earlier stage while they are still young. The Education Fund (TEF) plays a massive part in securing future education plan for children. Its purpose is to provide future payment for their schooling, usually during their higher education. These could be things like school uniforms, textbooks or Science/Sports equipment.
According to the Financial Educators Council, The USA spends about $670 million per year on financial education. Help comes from sources like financial service & banking, organizations, and entrepreneurs, government and nonprofit organizations.
Education Funds: Prepaid Tuition – Educational Savings Plan
- Prepaid Tuition aims to provide money for one’s college education. How does it work? Prepaid tuition plans let you ‘buy’ college credits/units based in today’s prices, for future uses. Thus, this also means paying in advance before education happens. There are many under the list like the Private College 529, Alabama Prepaid Affordable, Alaska Advanced College Tuition. You can refer to this link for the rest of the prepaid tuition plans and also what they are about https://www.cappex.com/articles/money/list-of-state-prepaid-tuition-plans.
- Educational Savings Plan works through investing. It lets you invest contributions. These contributions can be withdrawn later to pay for qualified tuition expenses. The procedure is simple. You open an account where you can invest your contributions. These are through two ways: mutual bond funds and stock mutual funds/money market funds. The only risky side to this is that, unlike prepaid tuition, this is not federally insured.
Benefits Of Education Funds
College tuition can increase due to inflation. Having educational funds can help you control student loan borrowing. Think about it. Instead of paying interest to the money you borrowed, you can instead save that amount. There are also states that offer a tax deduction, so depending on where you are, this could be beneficial.
Some schools offer Financial Education to students. Thus, this provides a massive impact on how they see the value of saving money for the future. Learning more about them will help them choices, concerning their priorities. Thus, it will make them enthusiastic about the value of education funds. To give you more idea about financial education, check out http://www.bnnbloomberg.ca/knowledge-first-financial-heritage-education-funds-merge-into-resp-powerhouse-1.957865.