Relying on future student loans could save you from having to worry about college now, and with so many current students taking out loans it could seem like an easy way to invest in education. But, the truth is, saving for college now could save you from spending so much more in the future. That’s simply because the sooner you start the more time you have to earn on your savings
Say you expect to spend $35,000 on college costs – according to this model by Edward Jones, you could save around $24,000 and potentially earn $11,000 in a savings plan account to get you to that $35,000. Or, you could borrow the $35,000 and pay an extra $13,000 in interest, putting you at $48,000. When looking at these costs in terms of monthly payments, saving vs. borrowing could mean the difference between paying $200 a month for ten years or paying $400 a month for ten years. Which would you rather pay?
Again, borrowing may seem like the easier option, but, as you can see, taking out loans in the future could cost you double!
If these numbers still have your head spinning, try not to worry! You may feel that saving is too costly, or requires too much attention for you to start it right now. But, savings doesn’t have to be difficult! There are all kinds of savings options to fit the needs of every family!
Instead of stressing, check out our Florida 529 Savings Plan – it may be just the college savings vehicle for your family. And, remember, even if you can’t save for all your expenses right this minute, any little bit you won’t have to borrow will help your child in the future. Plus, you’ll be able to relax a bit more in the long run, knowing that you’ve got something for the day your child’s ready to leave the nest.
There’s no better investment than your own child. But, why pay double later for what you can start saving today?