Key to saving for college is to budget for it early - WRBL

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>>

  • EducationMore>>

  • Twitter pages show NC college binge drinkers passed out

    Twitter pages show NC college binge drinkers passed out

    Friday, July 25 2014 10:03 PM EDT2014-07-26 02:03:40 GMT
    Binge drinking is not a new problem on college campuses but there is a new way people are seeing its impact.Twitter pages are popping up at college campus around the country for the sole purpose of showing students passed out from drinking too much.
    Binge drinking is not a new problem on college campuses but there is a new way people are seeing its impact.Twitter pages are popping up at college campus around the country for the sole purpose of showing students passed out from drinking too much.
  • School systems anxious for new budget as school year begins

    School systems anxious for new budget as school year begins

    Thursday, July 24 2014 7:18 PM EDT2014-07-24 23:18:50 GMT
    Wake County School Board Chairwoman Christine KushnerWake County School Board Chairwoman Christine Kushner
    Three weeks into the new fiscal year, there is still no new state budget and Wake County school board members are anxiously watching for a new plan for teacher raises.
    Three weeks into the new fiscal year, there is still no new state budget and Wake County school board members are anxiously watching for a new plan for teacher raises.
  • Houston school district holds 2nd job fair in Raleigh

    Houston school district holds 2nd job fair in Raleigh

    Wednesday, July 23 2014 7:42 PM EDT2014-07-23 23:42:44 GMT
    File photoFile photo
    A Texas school district once again held a job fair in Raleigh looking for teachers who are fed-up with stale salaries in North Carolina.
    A Texas school district once again held a job fair in Raleigh looking for teachers who are fed-up with stale salaries in North Carolina.
  • Trending StoriesTrending StoriesMore>>

  • DOT fixes sign for new 485 flyover that spelled Pineville wrong

    DOT fixes sign for new 485 flyover that spelled Pineville wrong

    Friday, July 25 2014 1:40 PM EDT2014-07-25 17:40:30 GMT
    Thursday morning the Department of Transportation officially opened a ramp from Johnston Road to I-485. The flyover ramp opened around 5:15 a.m.
    Thursday morning the Department of Transportation officially opened a ramp from Johnston Road to I-485. The flyover ramp opened around 5:15 a.m.
  • 2 charged with first-degree murder in beating death of UNC professor, cancer researcher

    2 charged with first-degree murder in beating death of UNC professor, cancer researcher

    Friday, July 25 2014 9:00 AM EDT2014-07-25 13:00:14 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.
  • VIRAL VIDEO: If you own a dog, prepare to happy cry

    If you own a dog, prepare to happy cry

    The video says it all.
    The video says it all.
Powered by WorldNow

1350 13th Avenue
Columbus, GA 31901

Telephone: 706.323.3333
Fax: 706.327.6655
Email: news@wrbl.com

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