Key to saving for college is to budget for it early - WNCN: News, Weather

Key to saving for college is to budget for it early

Posted: Updated:
RALEIGH, N.C. -

Most children who plan to attend college won't get a full-ride from scholarships and grants. But there are smart ways you can save and prepare for college costs.

According to Mike Hensley, managing partner of Guardian Capital Advisors, the key to saving for college is to start budgeting for it early.

"We know how important college is. It's a necessity these days," said Hensley.

Hensley says the North Carolina 529 plan is an excellent option for parents who want to help their children with higher education because it focuses on college education.

"They are state sponsored plans and states partner up with different mutual fund companies," said Hensley. "I think 529 Plan offers the best overall advantages from tax savings to investments to the use of the funds."

Hensley compares the plan to a 401k plan.

"You're able to use the earnings at any qualified institution in the U.S. If you're resident of North Carolina and you use the NC 529 Plan, there's actually a state plan deduction for your contributions," Hensley said.

And Hensley says the sooner you can fund your 529 plan for your kids, the better.

"It's the time value of that interest that you might build, the earnings on the investments, capital appreciation, so the more of that you can get that's tax deferred and tax free when you take it out the better," Hensley said.

For those who haven't planned and saved for college costs, it's not too late. There are options for both parents and their children.

"Children can work. They can get student loans; they can get grants, scholarships, or pay as you go," said Hensley.

But if your child does earn a scholarship for school and there's money left in the 529 Plan account, the owner can take a distribution out, but have to pay a penalty of 10 percent on the earnings plus income taxes.

If the child is the owner, they may be in a lower tax bracket and the penalty would not be as big. There is also the option to roll that money into another 529 plan for another child without a penalty.

Sharon Tazewell

Sharon anchors WNCN Today weekday mornings starting at 5! Her background has helped mold her into an outstanding journalist and a perfect fit for our community. Sharon's also a trained pianist and a member of NABJ. More>>

  • Trending StoriesTrending StoriesMore>>

  • 77-year-old questioned, defended as true Marine after NFL player takes his photo

    77-year-old questioned, defended as true Marine after NFL player takes his photo

    Tuesday, July 22 2014 1:58 PM EDT2014-07-22 17:58:35 GMT
    (WMC) - It was a story that made its rounds on social media. On a recent flight DeAngelo Williams, Mid-Southerner and running back for the Carolina Panthers, gave his first-class plane seat to a 77-year-old
    Family members are upset and hurt that their relative, James Wesley Bolden, is being called a liar and "a fake."
  • Largest companies by revenue in each state

    Largest companies by revenue in each state

    Thursday, July 10 2014 8:01 PM EDT2014-07-11 00:01:10 GMT
    Broadview Networks recently decided to find out the biggest -- by revenue -- company in each state in the US.The company used the Fortune 500 list to start with, but needed data by state, so it turned to Hoover's.With data from that company, they were able to search through each state's list of companies and then find the largest -- by revenue.Just flip through the list above and see who is the biggest in each state, what town they are based and their revenue.
    Broadview Networks recently decided to find out the biggest -- by revenue -- company in each state in the US.The company used the Fortune 500 list to start with, but needed data by state, so it turned to Hoover's.With data from that company, they were able to search through each state's list of companies and then find the largest -- by revenue.Just flip through the list above and see who is the biggest in each state, what town they are based and their revenue.
  • UNC professor robbed, beaten to death in Chapel Hill

    UNC professor robbed, beaten to death in Chapel Hill

    Thursday, July 24 2014 2:38 PM EDT2014-07-24 18:38:46 GMT
    A UNC research professor was robbed and beaten to death Wednesday afternoon on University Drive in Chapel Hill, police said.
    A UNC research professor was robbed and beaten to death Wednesday afternoon on University Drive in Chapel Hill, police said.
Powered by WorldNow

1205 Front St., Raleigh
N.C., 27609

Telephone: 919.836.1717
Fax: 919.836.1687
Email: newstips@wncn.com

Can't find something?
Powered by WorldNow
All content © Copyright 2000 - 2014 Media General Communications Holdings, LLC. A Media General Company.