Every parent wants his child to have a good education. Education can take a man to places where he otherwise would never go. So the question is, how do you go about setting up your childrenĀ's college fund?
First step, identify when your child is most likely to start college. Or, how many years do you have left to save up before your child goes to college? The current age of the child must be factored in. An older child would mean a lesser number of years to prepare for college expenses. You would have to save more aggressively. A younger child will give you more time to save for college. This does not mean less aggressive saving for college. You just have a little more breathing room.
There are those that argue that saving up for college is not a wise investment; that saving up for retirement is better instead. At this point, the question is moot as you have already decided to save up for your childrenĀ's college funds.
How much do you want to have saved by the time college enrolment time comes by? This is important as the amount you have in mind will affect your savings and spending patterns. Will you cover all costs or will your child share some of the burden of college expenses? If your child is going to cover some of the costs, how much of the total cost would you like your child to shoulder?
Where are you sending your child to school? Are you sending your child in state or out of state? Will your child be going to a public school or a private school? The costs will vary greatly if your child is going to college in or out of state. Out of state will obviously cost more as you have to pay for board and lodging fees apart from standard college expenses. If your child stays within the state, he or she may stay at home and save on rent.
Private schools will cost more. Are you prepared to pay more? If you are, start saving now as private education will cost you a pretty penny.
Save now. DonĀ't wait until later. Start saving now. This will give you time to build up the funds necessary for your childrenĀ's college education. Budget wisely and creatively. If thereĀ's a will, thereĀ's a way. If you are really determined to set up a college fund for your kids, you will find a way.
Where do you want to keep the money? There are many options for saving. Are you going to save the money in a savings account? This is safe but not as high yielding as other accounts can be. DonĀ't know much about your options? Consult a financial planner. A good financial planner can help get you on the right track.
Make regular deposits. Auto debit deposits if possible so that you donĀ't have to worry about accidentally using the money meant for your childĀ's college fund for other purposes. Make extra deposits during special occasions like birthdays and holidays. If education is going to be your greatest gift, pour effort into it.
Involve your child. Let your child know the purpose of the fund. Get your child to help grow his college fund to teach responsibility and thrift. If your child has a part time job, make sure he contributes towards the fund too. People tend to take greater care of something if they have had to work hard for it.
Setting up your childrenĀ's college fund will take years and a whole lot of patience and discipline. In the end though, the sacrifice will bear fruit, lovely fruit.
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