Going to college is expensive and the years go by it is going to get more expensive. The best way to start saving for your teenager’s college fund is to start when they are babies. Many banks have programs that are like a savings account that you can deposit money into, but it is called a college fund. There is an insurance policy that you can get and when the child turns eighteen they can either continue the policy or they can cash it in and use the money for school.
In order for you to know approximately how much it is going to cost your child to go to college there are some online calculators that you can use to see how much it would cost. Once you have an idea of how much it is going to cost then you need to decide if they will be going to a private, public, or community college. Of course the most expensive college would be the private school with the community college being the cheapest.
In addition to the saving’s account there are education IRA Benefits that have less taxes that you can get for their education. All you have to do is decide just how much you want to contribute to the fund each month and just make a payment to it. When your child gets old enough to get a job have them put a certain percentage into a fund or savings account toward their college fun. You could also consider getting a mutual fund, but it would be best if you stay away from stocks as these can be risky.
Instead of getting a lot of toys for Christmas as their grandparents, aunts, and uncles to give the child a savings bond, which they can get for twenty-five dollars.
In addition to figuring out approximately how much it is going to cost for college you should figure out the number of years you have to before they go which would be at least eighteen years if you start saving when they are born and then figure hour much you would like to have saved up by that time. Once you have that figure you can divide by the number of months so you will be able to see how much you should save each month.
Ever how you start to save whether it be using a savings account, mutual fund, or IRA just for college, make sure that you get the best interest rate that you can. Most of the time a savings account does not have a great interest rate (but some online versions do do pretty good!). Make sure that what you are putting back is an amount that you can afford so you do not feel like you are struggling to put that much away each month.
When you get your income tax refund each year you can also take part of it and put it in the college fund. You can also start a 529 savings plan, which is an investment account and anyone can invest into this fund tax free. There is a penalty if the fund is used for anything but for college.