Late 2010, Sallie Mae organized a poll that asked Americans about their top money goals for 2011. Results showed 20% planing to cut general costs and expenses, 16% to pay down credit cards, and 13% to take a vacation or make a major purchase. For any family sending a student to college, one of the smartest moves is to complete the Free Application for Federal Student Aid (FAFSA). Based on their vast experience in offering Money Saving consultancy services, Sallie Mae compiled their top money saving tips for education and life in the US and they are:
1. Set up a monthly contribution to a child’s 529 college savings plan
Money doesn’t grow on trees, but saving with tax advantages and even potential state tax deductions can help it grow.
2. Make gifts throughout the year, for holiday, birthday and graduation, more meaningful by contributing to a 529 college savings plan
A toy can get broken or forgotten in minutes, but the gift of education can last a lifetime, and Sallie Mae’s Ugift program makes it easy.
3. Consider the full cost of college
Choose where to attend and have a plan to pay for your full degree — not just one year at a time.
4. Money saving with filling out the FAFSA
It’s your ticket to federal and state financial aid.
5. Research and apply for scholarships for college
6. Borrow only what you can afford to repay after graduation
A good rule of thumb is to make sure your monthly loan payments after graduation stay under 20 percent of your expected monthly gross salary. It’s never easy, but this rule will bear fruit sooner than you think.
7. Pay extra on your credit cards and other loans whenever you can
If you have student loans, make payments while in school so you don’t pay interest on interest.
8. Max your match for retirement
Don’t miss your employer’s matching contribution; start early to save for retirement.
9. Put your monthly bills on automatic debit
Not only can you build a strong credit score by paying on time each month, but some lenders offer a benefit for enrolling to make payments by automatic debit. If you’re repaying student loans, check with your lender to see if there is an alternate payment option that might better meet your financial situation at the moment and adjust as you go along.
10. Claim the tax credits and deductions you deserve
Explore expanded credits for higher education expenses, or, depending on your state of residency and which 529 college savings plan, explore tax credits or deductions on your state income tax for contributions to 529 college savings plans. Also explore deductions for home refinancing points or interest on student loans, and special credits for energy-efficient windows, to name a few.