Whether your child is still learning to walk and mobilize their toddler tools, or moving deftly toward college age, you should be saving for college. Here are some things to consider to start saving for college properly.
- Current age of your child. Children have a habit of growing up much too fast for most parents’ taste. If you haven’t yet experienced this phenomenon, you will. When you look at your 15 year old, you’ll see him/her at age two or three—which was only “yesterday.”
- College costs continue to increase unabated. When current Baby Boomers went to college, “expensive” tuition was around $2,000 to $3,000 per semester. This level applied only to more prestigious schools, like Harvard College, Boston College, and Stanford University. Today, in most cases, you merely need to add another “0” to estimate tuition.
- Classic and newer options to save for college. Classic
college savings options include savings accounts, CDs, investment accounts, mutual funds, annuities, and U.S. Savings Bonds. Newer college planning choices include 529 plans and Coverdell education savings accounts. The Gerber Life College Plan is another excellent option. It provides a “guaranteed benefit payment” for children expected to begin college in 10 to 20 years.
- Your current and projected financial condition. The recession of 2007 to 2009 taught us multiple lessons about financial uncertainty. Many who believed their jobs and finances were stable and secure received unpleasant surprises. We also learned that even the largest university endowment funds, from which most scholarship money comes, can be decimated by a down economy. Until—and unless—these funds recover strongly, millions of scholarship dollars will remain unavailable.