Did you recently send a child off to kindergarten, high school, or college? If so, you’re likely to come face-to-face with the high cost of education, if you haven’t already.
USA Today notes that the price of school supplies has jumped 7.3 percent this year (more than inflation), bringing the annual cost of school supplies for high school students to $1,223. If your child is university-bound, the current average annual tuition is $39,500 a year at a private school and $18,000 at a public one, according to CNN Money. And then, of course, there are the associated fees throughout the year, which can include everything from field trip costs for your third grader to a monthly parking pass for your college freshman.
So what’s the best way to handle all these costs?
If your child is attending kindergarten through 12th grade at a private or religious school or heading off to college, The New York Times’ Bucks Blog notes that the American Taxpayer Relief Act of 2012 allows you to deposit up to $2,000 each year into an investment account and get tax-free earnings as long as you put those funds towards the cost of tuition or other qualified expenses. The site notes that this can add up to significant savings for those who use it wisely.
If you’re looking for a place to stash these or any other funds that you’re setting aside for your child’s education costs this year, consider putting them in a savings account where they’ll earn interest.
For instance, an Ally Bank Money Market Account or Online Saving Account both come with competitive rates and could be the perfect place to park education funds. Our Money Market Account even comes with a free debit card so it’s easy to access those funds whenever, wherever. Both accounts have a limit of six transactions each month, but you’ll probably find that this works just fine for the occasional school cost that pops up throughout the year.
Do you use a savings account to set aside funds for school costs and fees? What do you think will be the most expensive costs you’ll encounter?