Based on a survey reported to US News, the average tuition last year was roughly $41,000 for private colleges to $11,000 for public colleges. The numbers are only expected to get higher in the following years to come. Considering another survey from Bankrate that shows average American households only having $8,800 in savings, these two figures are alarmingly disproportionate. If you’re in the same boat and want to save up for your kid’s education as early as possible, here are four tips:

Open a 529

Most personal finance articles only talk about 401ks and IRAs and few tackle the lesser-known 529 plan. It’s essentially a savings plan that is sponsored by the state government to encourage families to save up for future education expenses. Contributions made to a 529 plan are often tax-deductible. Each state offers a slightly different 529 plan, so make sure to check out which state’s 529 plan is right for you before signing up for one.

Invest in Stocks

Stocks are a relatively safer option than currencies or commodities but are a lot better at growing your initial capital than a traditional savings account or treasury bond. That being said, you’ll want to carefully select what stocks you invest in for long-term growth. Use stock screeners to narrow down the best performing stocks within the time frame you are looking to invest in the market.

Consider a Roth IRA

Roth IRAs are synonymous to retirement plans, but it doesn’t necessarily mean that’s all it’s good for. A Roth IRA can be a great investment plan for tax-exempted dollars as long as the taxpayer makes the proper distributions. Unlike a 529 plan, however, relatives cannot contribute to a Roth IRA plan, so make sure to weigh the pros and cons of each plan to get the best possible savings over time.

Consider a Permanent Life Insurance Policy

Often used by high net worth families as a savings strategy for their kid’s higher education, a permanent life insurance policy is essentially a traditional life insurance plan but with the added feature of having some of the money go into a death benefit and another portion going into a tax-exempted account.

Time flies and saving as early as possible is important to ensure your child gets the best choices for his/her higher education. Use these tools as a way to save more over time in addition to healthy money management habits.

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