Planning a Great Future for Your Kids: How to Save for College Today

Do you have a child you want to send to college? Saving for college, even if it’s not for your own child, can be a big responsibility. It is something that should start while the child is young so it doesn’t become too big of a burden several years down the road.

Here are a few tips to help make saving money for college a little easier:

1. Start Early. It’s no secret that college comes right after high school, so it is an expense that can be planned for well in advance. Many people start saving for college soon after a child is born. The earlier you start the better.

2. Open a Tax-Free Account. If you know you will be able to contribute monthly to a college fund, open a tax-free 529 college savings account. Any interest is tax free. In addition, any money you withdraw for school expenses, such textbooks or tuition, will not be charged a penalty. The only requirement for this type of account is a monthly deposit. This can be as low as $50 a month.

3. Open a UPromise Account. This is a painless and free way to save to save for college. Sign up for a UPromise account and receive cash back on many purchases, including online shopping, restaurants, and even trips to your local grocery store. You simply register one or more credit cards with the program and when you use that credit card on qualifying purchases, they credit a percentage of your purchase to your child’s college account.

4. Ask for the Gift that Keeps on Giving. Do relatives and frienda constantly ask what to get your child for birthdays and Christmas? If so, why not ask them to put some money towards the child’s college education? Not many people will turn their nose up at that worthy contribution. This money can add up quickly and can earn interest or other benefits over time, which make it go even further.

5. Pre-Pay When You Can. Some states, like Nebraska, offer residents an education trust account. You must have an initial deposit and make minimum monthly deposits (like the 529 account), but the interest is tax free and you are able to use the money at any state college or university. You also get to lock in the current tuition rate when you sign up. That alone can save you thousands of dollars!

6. Make Targeted Investments. In line with a savings account for college, you can also make targeted investments. This is best done with expert help from an investment firm or a bank. Investments will frequently pay higher interest rates than a savings account. Just periodically place money into the investment fund and watch them multiply over the years. If done early enough and with frequent contributions, the amount can be sizeable once college comes around.

The key to saving money for college is to start saving early and as wisely as possible. With enough future planning and regular contributions to the college fund, there should be a fairly large amount of money readily available when college looms on the horizon of your high school student in the coming years.