Investing Money for Your Child’s College Fund

1110368564_6082a1afbb_z-flickrDo you have kids? If so, it is important to start saving early for their college education. College is not cheap, and it is going to continue to get more expensive as the years go by. Because of this, you should consider investing to save for your child’s future education.

(Image via Flickr by Lyndi&Jason image hyperlinked)

Why Should I Save?

College is extremely expensive. Kids just out of high school are rarely able to pay for their education themselves. It can be a frustrating, stressful time for students and parents. However, if you save ahead of time, you will be able to help your child get the education they need to be successful in life.

Money is Tight – How can I Save?

It’s not always easy to save money. However, there are simple ways to start putting money aside. Consider putting away even a few dollars per paycheck. This adds up over time. In fact, just $10 a week will show a savings of $520. Many parents choose to cut back on indulgences, such as a daily coffee at the coffee shop, to help save money for their child’s education. Another option is to take as much or as little as you are able and invest it.

What if I’m new to Investing?

There are a variety of investment options when you are saving for school. There are a variety of guides out there to help you choose the right investment for your family, such as Fisher Investments YouTube videos. These videos show you different investment options and how to make them.

What is the Best Education Investment?

Again, this is up to you and your family. Contacting an investment advisor can help you narrow down the best options. Not only do you need to decide what type of investment to make, you also need to know how much money you plan to invest, and how quickly that money will grow.

Are There Penalties for Education Investment?

This depends on the type of investment you choose. However, many college investments, such as the Coverdell Education Savings Account, do not have any penalties if you are withdrawing the money for educational purposes. However, keep in mind that there is a maximum contribution to this account of $2000 per year, per child.

What are the Benefits of Saving for Education?

There are a variety of benefits you and your child will receive if you save for their education. First, and most importantly, they will not need to worry as much about how they will pay for college. However, there are other benefits, as well. You can get tax reductions do to the investment plans. On top of that, the money grows tax free. When you and your child both know that they don’t have to worry about going into thousands of dollars of debt for school, you both have peace of mind.

Saving for your children is important. Help ensure that they get the best education possible, without having to worry about where the money will come from, when you start saving early.

 

Resources:

http://www.babycenter.com/0_saving-for-college-a-guide-for-parents_348.bc

http://www.investopedia.com/articles/03/010303.asp#axzz2M245Ahxy

http://abcnews.go.com/GMA/Savings/secrets-saving-saving-childs-college-education/story?id=11803141

http://financialplan.about.com/od/savingforcollege/a/howmuchcollege.htm

http://www.investopedia.com/ask/answers/09/options-save-childs-education-children.asp#axzz2M3MOVfbD