Saving for College
Investing in education is an excellent start to investing in your child’s future. But to do so without the burden of debt you should start as soon as possible.
Start Early
The sooner you start saving, the more time there is for your college fund to grow. Over time, the benefit of compound growth will make paying for college much less painful.
Save Often
Determine your savings goals and then what your budget allows. This number can change with your annual budget. Setting up an account with an automatic transfer is an excellent way to grow your college fund without having to think about it each month. Also consider investing some or all of bonuses, inheritance, and gifts to grow the fund.
Choose Wisely
There are several different options when it comes to saving for college. Most often, customers choose a Coverdell Education Savings Account, which offers the potential of tax-free growth. Distributions are tax-free when used to pay for qualified education expenses, including tuition and books, equipment and tutoring. The contribution limits are low, so most people that qualify should use a Roth IRA instead for its higher limits and more flexibility.
