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Saving for a College Education
by Jan Lehrtl
http://www.faqeducation.com
Since getting a college education is important to so many
people, and since the cost of getting a college education
is steadily rising, most families will need to plan for
education expenses well in advance of their children
attending college. Often, parents will begin saving for
college at birth. Many families receive help from grandma
and grandpa to fund their children's college educations.
If you have children, and you want to fund their college
educations, the time to start saving is now!
There are many ways to fund education accounts as there
are choices of colleges it seems. Your choice is largely
based on the degree of risk you're willing to assume
combined with the amount of time you have to save.
Investment choices range from the conservative,
government-backed savings bond to the most speculative of
investments. Bear in mind that while there are some very
high-yield options out there, most investments have no
guarantee, and the investment vehicles having the highest
potential yield also have the highest potential risk. Keep
all of these things in mind before commiting funds to any
investment vehicle.
Mutual funds are a popular option for education savings.
Many accounts can be set up to be funded through payroll
deduction every pay period. This makes for a hassle-free
transaction that happens in such a way that you aren't
likely to miss the money. Twenty-four such deductions
annually over eighteen years combined with leaving the
continually compounding interest in the account will help
that small monthly amount grow exponentially into a
healthy funding source for your child's college education
expenses.
When family members offer to buy gifts for your children,
you may want to suggest that they bestow occasional cash or
bond presents in addition to or in lieu of a tangible
item. While children and teens may not appreciate this
strategy initially, they will likely be grateful for it
when it comes time to pursue higher education.
Older teens may want to work during summer breaks and put
aside some of their earnings for a college savings plan.
Eight to ten hours a week for eleven or twelve weeks can
easily add $1,000 to a savings account and still leave
plenty of time for leisure activities. Requiring teens
to invest in their educations helps them to feel ownership
of their education and the future it can bring. That
"buy-in" can help them to approach their college
educations more responsibly.
Are you still a little short on funds now that it's time
for your teen to go to college? It~s not too late
to apply for scholarships, grants, and loans. Have her
fill out the FAFSA form which will determine her
financial aid eligibility at all participating institutions
of higher education in case she transfers to another
campus later. This form can be readily obtained at the
college's financial aid office.
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