How to Start a College Fund

Creating a college fund is an excellent way to make sure that you'll be able to finance your children's college education.

Difficulty: Easy

Instructions

Things You'll Need:

• Investment Advice
• Calculators
• Financial Manager
• Savings Accounts
• Savings Bonds
• Investment Software
• Personal Financial Software
• Calculators

1. Identify when your children will most likely be going to college.

2. Determine how much you want to have saved by that point. Decide if you will be sending your children to public or private schools, since there is a large price difference.

3. Begin saving as soon as possible.

4. Choose where you want to deposit the money you will be saving. A savings account is safe, but offers a very low interest rate, while stocks can return very high rates but are very risky.

5. Consider investing in a tax-free individual retirement account (IRA) designed specifically for college education funds.

6. Make regular deposits into your account or accounts, and consider making extra deposits at holidays and birthdays, or other special occasions.

Tips & Warnings

• Choosing where to invest money for college can be challenging. Consider working with a financial planner, broker or investment management company. Be prepared to tell them how many children you have and their ages.
• A college education is invaluable to a child. Don't gamble it away with risky investments.
• Don't wait to start saving until it is too late.
• Don't tap into the accounts for anything else.

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on 6/14/2007 i am 18 yrs old and i want to start a college fund for my sister i want to know hpw to fill application

on 8/6/2007 If you are a single parent and receiving child support monthly, use that money to invest in your child's college fund.

on 11/22/2005 Anyone can contribute to a qualified state tuition plan for a child - a parent, grandparent and even a non-relative.

on 11/22/2005 A Qualified State Tuition Plan allows for much greater contributions to a child's college fund than an Education IRA. Earnings are not taxed until withdrawn unlike holding stocks and bonds. Check out the pros and cons of QSTPs.