How to start saving for your child’s education

One of the most expensive aspects of raising a family is paying for your child's education. With college tuitions on the rise, and the pressure to graduate from college growing, it’s more important now than ever to start saving for your child’s education. To help get you started, True Homes has put together a list of helpful guideposts to keep in mind when planning for your child’s education. 

Save Early, and Save Often

The more time you have to save for your child’s education, the more money you’ll have available when the time comes. The power of compounded interest helps your education savings snowball into much more than you’d think. For example, if you start setting aside $200 per month when your child is born, those contributions will grow to almost $70,000 by the time your child turns 18 (assuming a 5 percent annualized return). A good way to make keep up with your child’s education savings is to have a set amount deducted from your paycheck every month.

Consider Special Tax-Deferred Education Accounts

There are a couple of special, tax-deferred education accounts that can help you get the most out of your education savings. Two popular education savings accounts are: 529 College Plans, and Roth IRAs.

529 Plans are state-sponsored investment vehicles; similar to your employer-sponsored 401-K. 529 Plans are set up by the parent, who always retains control of the account. The main benefit of 529 Plans is that the account owner (parent) doesn’t pay income taxes on the account’s earnings, meaning your investments can grow tax-deferred much like an IRA. Contributions made to the 529 Plan are after-tax dollars, and qualified withdrawals for education expenses are tax-free. Additionally, there are no income restrictions, so anyone can open (and contribute to) a 529 Plan. And if your child decides not to go to college, you can always transfer the account to another beneficiary. FinAid.org has a comprehensive page detailing the pros and cons associated with 529 Plans.

Roth IRAs are another popular type of account to start saving for your child’s education; however, they are much more limited in terms of who can contribute to them and how much. Roth IRAs must be opened in your child’s name, and there may be minimum opening deposits and/or annual contributions. Roth IRAs also have income cutoffs, and must be opened at least five years before you plan to start withdrawing money for education expenses. Furthermore, any profits withdrawn from Roth IRAs are taxable. The upsides to Roth IRAs is that any unused money can be used to jumpstart your child’s retirement savings, and they are much more flexible in terms of investment options.

Prepaid Tuition

A number of states and private universities offer prepaid tuition programs that can help you save for your child’s education while protecting against tuition inflation. Basically, once you start the plan, you’ll be locked into that year’s prevailing tuition rates. For example, can prepay for a year of college tuition while your child is still in elementary school. Monies paid into prepaid tuition programs are generally transferable if your child decided to go somewhere else; however, the dollars may not stretch as far since you’ll be paying then-current tuition costs. A number of private universities also offer prepaid tuition programs. You can learn more about private college 529 Plans here.

Talk To Your Kids about Their Education Expenses

Another aspect of saving for your child’s education is educating them about the reality of college expenses. If you’ve been saving for your child’s education, use it to motivate them to do better in school. Giving your children a sense of ownership in their education savings account lets them know that doing good in school and receiving scholarships potentially means more money in their pocket. 


If you have specific questions about saving for your child’s education, you should meet with a qualified financial advisor who will be able to assess your individual situation and help you develop a plan that best suits your needs.

As the largest home builder in Charlotte, NC, True Homes understands that your family’s future is important. We offer a number of new home communities marketed towards new families with floor plans for every budget. To learn more about True Homes, visit us online at www.truehomesusa.com or call us on the phone at 704-271-1191.

Building an Affordable Dream Home in the Carolinas

Building a dream home in one of the most coveted places to live does not have to be a budget-buster. With proper planning and a home builder who offers the most bang for your buck when it comes to features and options, building an affordable dream home in your desired Carolina community can easily become a reality.

Planning, Preparation and Patience

When it comes to the development of your new home, patient planning and careful consideration are the critical building blocks of success. Take the time to exercise due diligence for all phases of the planning stage, from choosing the right neighborhood, to floor plans and future needs. Be sure to leave no stone unturned in this critical stage or it could come back to haunt you – and your new home.

Pre-packaged vs. Custom Home Designs

This is one area that can truly save you a lot of money – and time. For cost and affordability purposes, selecting pre-packaged plan options from a builder is typically the most frugal way to go. Although building custom may seem ideal, it does require hiring an architect to draw out floor plans and develop blueprints. All of that work does not come cheap, and it takes a considerably more amount of time to complete than if you were to select a pre-packaged plan.

Lots and Land

Where you build can make a huge difference in the cost of your new home development. Beware of cheaper lots that can actually end up being more expensive in the end. Choose a place that is in close proximity to electric, gas and public water lines. Also, consider lots that require less removal of debris, such as rocks and trees. All of this can add up to big bucks so remember step one and do your land homework.

Keep It Compact

Compact homes are far less expensive to both build and maintain. Although lifestyle and future needs (raising a family or retiring) will dictate whether you have a split-level versus a flat ranch home, for all intents and purposes, the more compact - smaller and taller - the more cost effective. Also worth considering is the shape of the home itself. Funky shapes with intriguing lines will cost far more to build than square or rectangular floor plans.

Pay Only for Livable Space

During your search for a new home builder be sure to find out exactly how they calculate the cost of the space you are paying for. Attics, basements, walls, stairs, garages and other “phantom” (non-livable) space are considered differently per builder. Knowing how area and volume are measured can make a huge difference in the cost of your new home building project.

Check the Recycle Bin

One of the best ways to cut building costs is to use recycled materials. Not only do they save money, the earth and environment will thank you for it. You may also want to consider a trip to the architectural salvage warehouses that house hundreds of items such as wrought iron fencing, doorknobs and light fixtures. Although a bit more laborious in terms of the salvage shopping, this option can drastically reduce home building costs.

Energy Efficient, Energy Star

While a bit more costly to install than non-efficient items, in the long run, going energy efficient will save a great deal of money over time. Green homes equipped with items such as solar panels and Energy Star appliances will greatly reduce utility bills, leading to significant savings for many years to come.

True Homes is a new home builder with locations in Charlotte, North Carolina and Charleston, South Carolina. To learn more about building your dream home in our more than 60 True Homes communities across the Carolinas, visit our website at www.truehomesusa.com or give us a call at 704-271-1191.