What are some ways I could save money for my childrens college education?
My kids are young right now, but I want to start saving money so they have money for college when they are grown. What types of ways could I save money for this? Are mutual funds something I could use?
I wouldn’t invest in any mutual fund or stock market account when it comes to anyone’s future. Simple steps are all it takes to save more than enough money for college education and even a retirement.
This is my own idea, but I would setup a savings account for each one of my children and make sure I start it off with a good lump sum of about 100 dollars. Make sure that the account has compounded interest (either monthly, quarterly, yearly, etc.), and a high interest rate.
To build it you simply set aside 10 dollars a week for each account to invest in. You could even go as low as 1 dollar a day! Every month each account would get 40 dollars. This isn’t a lot but after a year you would have saved 520 dollars, and after 18 years it would be 9,360 dollars.
All of it starts to grow and grow, and when you apply the compounded monthly interest rate of even 3.5% it would seem as if your money was on steroids.
In the end you can go as high as you want to go when it comes to what you weekly set aside to put in the bank, even 20 dollars a week would equal 1,040 dollars a year plus the compounded interest.
Here is an example: I start with 100 dollars and put it into an interest bearing account that is compounded monthly; with an additional 1,040 dollars a year, each year for 18 years at 3.5%. After the 18th year I would end up with a ballpark number around 26,300 dollars!!!
That is the power of savings!!
piggybank
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Dont buy them cars 2. Dont buy them toys. 3. Dont…. um….pay for……….their………………………..meds?
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depending on how much money you have and how long it is before your children go to college i’d say invest your money into a COD (certificate of deposit) and how much you trust that your income will remain steady. also try these!
http://www.tdbanknorth.com/investment/financial_services/college_planning.html
Hope this helps and good job for thinking ahead! i wish my parents did that >.>
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the link doesnt work for some reason so go to the td bank north website then investments then college savings. you can do the same for almost any bank website some just offer different ways of saving up for college. hope this helps!
Mutual Funds are certainly a path to take. However, there are 529 plans created specifically for saving for college. 529 is a section of the Tax Code. http://www.irs.gov will have more information on section 529. Some states have 529 programs so I’d check with your particular state to see if they have one. I also think that you could invest in another state’s 529 program as well. You’d just have to check it out. I’d also google 529 programs. Louisiana is one such state that has a 529 program. Its website is http://www.startsaving.la.gov.
Start now while they are young.
BTW: these programs are tax deferred….woohoo!
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I wouldn’t invest in any mutual fund or stock market account when it comes to anyone’s future. Simple steps are all it takes to save more than enough money for college education and even a retirement.
This is my own idea, but I would setup a savings account for each one of my children and make sure I start it off with a good lump sum of about 100 dollars. Make sure that the account has compounded interest (either monthly, quarterly, yearly, etc.), and a high interest rate.
To build it you simply set aside 10 dollars a week for each account to invest in. You could even go as low as 1 dollar a day! Every month each account would get 40 dollars. This isn’t a lot but after a year you would have saved 520 dollars, and after 18 years it would be 9,360 dollars.
All of it starts to grow and grow, and when you apply the compounded monthly interest rate of even 3.5% it would seem as if your money was on steroids.
In the end you can go as high as you want to go when it comes to what you weekly set aside to put in the bank, even 20 dollars a week would equal 1,040 dollars a year plus the compounded interest.
Here is an example: I start with 100 dollars and put it into an interest bearing account that is compounded monthly; with an additional 1,040 dollars a year, each year for 18 years at 3.5%. After the 18th year I would end up with a ballpark number around 26,300 dollars!!!
That is the power of savings!!
References :
http://www.moneychimp.com/calculator/compound_interest_calculator.htm I love this!!! It is the best way to figure out for both the long term and short term in savings so tinker around with it.