You should start saving for college when your child is born. You did not need to visit this web site to know that! The fact is, however, life happens along the way, and while we know we should save for our children’s education, it is hard to make it a priority when they are 3 and 4 years of age. Even as they grow up, it is still hard to do. According to the US Department of Agriculture’s 2006 report "Expenditures on Children by Families," a family living in the northeastern United States, with a household income over $64,000 will spend $348,418 to raise and educate one child. That includes the cost of education at an average public university. No wonder it is difficult to save for college!
One of the most popular ways to save is with a college savings plan, such as a 529 plan. These plans are great savings vehicles, but there are several restrictions and pitfalls to 529 plans. You should examine them very carefully before investing in one.
The other thing to keep in mind is education savings done improperly can impact your retirement! You can borrow for college, but you cannot borrow for retirement! To learn about how we can help you with your college funding questions, click here.
