In yesterday’s post of Tips to Save Cash we talked about how you can make some extra cash in the snow season.  In this segment I want to talk about setting up savings accounts and setting up savings for tuition for your young ones.  There are many ways to save for college and I would like to show you a few.

Each state has what is called a 529 Savings Plan.  The details differ from state to state, but all of the plans offer a non-taxable interest on the money put in.  Meaning if you put money in the account you will not be charged a tax on the interest.  There are states out there, like Arkansas, who will match the contributions to the plan up to a certain limit.  In order for me to go more into detail with how the plan works I would have to talk about all of the states, but I will say that a 529 Savings Plans is a must if you want to set something up for your children to get a further education.  There are two different 529 Savings Plans; Savings Accounts and Prepaid Tuition Plans.

In my opinion the Prepaid Tuition Plan is the better of the two.  It is safer and it gives you the freedom to reclaim the assets for any reason.  It is safer because it has a fixed interest rate.  Like I said earlier, there are differences to the plan state to state but I assure you that a 529 Savings Plan is the best way to go when saving for schools.  Check out what your state offers for the 529 plan.

People generally have savings account to save money.  Others put money in their savings account and transfer it to their checking when they need it.  There is no wrong way to manage a savings account, in my opinion.  I do personally think that a savings account is there to sort of take your mind off of the money you have.  If you take 20% of your check each week and put it in a savings account over a year’s time you will have 20% plus interest saved up.  It’s that simple!  When you need to dip into the savings account you will have funds available.  To me taking out a percentage of each check and placing it in a savings account is the best way to save money.  If you have something you would like to share we invite people to comment on our blogs…