Saving for Children's Education

Would you like to help pay for your child’s education?

Paying for college can be one of the biggest financial concerns for many parents. If you are a new parent or have kids that are young, then you will want to look into college savings plans. There are smart ways to save for your son or daughter’s college.

When should you start saving for college?

As with any investment, the earlier you invest, the more time you have for it to grow. Some parents choose to invest as soon as their child is born and some decide a few years later. Ultimately, it is your decision but the earlier you start, the more time the money can compound and the less stress you may have later on.

How much should you save for your child’s education?

The amount you should save will depend on many factors. Some of these include if you want to pay for college in full or in part and if your child will pick a public school or a private school. The cost of college has tripled over the last three decades and it continues to rise. To help your child start their adult life without massive debt, it’s best to start saving for their college now.

One simple way to estimate how much you should save is called the “college savings 2K rule of thumb”. This calculation is when you multiply your child’s current age by $2,000. This is the amount you should have in college savings by that age. However, this is just a general rule of thumb and it is never too late to start saving for your child’s education.

What are the options for saving for my child’s education?

There are many college saving plans available. A financial planner can help you decide which option is best for you and your family.

Some options include:

529 College Savings Plan

Traditional Savings Plan
Roth IRA
Coverdell Education Savings Account
Prepaid Tuition Plan
UGMA or UTMA accounts

Saving for your children’s education is important. Starting a college savings account early helps set your child up for the future. It is never too early to start saving for your child’s education and take advantage of the power of compounding. Our financial planners can help you choose the right college savings plan for you and your family.

Saving for Children's Education