Thinking about saving for your baby’s college fund can seem a little ridiculous. When all a baby is concerned with is the next feeding and being burped, just entertaining the notion of baby all grown up and going to college seems so far away. It can even be upsetting, and maybe that’s why many parents tend to put it off as long as possible. But it’s far better to begin saving early than letting the years slip by and putting a serious dent in your budget down the road.
If you’re a new parent and you’re thinking ahead and beginning to plan for your baby’s college already, time is on your side. Whether your child attends a traditional four year university or goes on to get an online degree you’ll have eighteen years to make small savings now mushroom into a big college fund later. There are several tips to making it easy.
A 529 savings plan is a great way to get started. These plans are specifically designed to save money for your child’s college. It’s structured a lot like many retirement plans. These plans generally offer several investment options and you can nurture your investment nest egg toward maturity alongside your son or daughter.
There is also a 529 plan that allows you to pay into an account gradually; essentially paying for your child’s education ahead of time. This plan contains none of the risks associated with stock market drops, but also none of the opportunities of stock market gains.
Another great way to save substantial sums of money for your child’s college fund is a program called Upromise. This programs works by giving you back a small percentage of your purchases from participating businesses. These small percentages go directly into your child’s college fund. With a huge number of participating retail stores, grocery stores and restaurants, Upromise allows you to constantly accrue small percentages of money while buying the goods and services you normally purchase anyway.
It’s also a great idea to start a special college fund savings plan for your child when they’re still a baby. Just contributing small sums of money on a frequent basis can really add up. When you add the power of compound interest to your steady deposits of small amounts of money, you can grow the amount much larger and more rapidly than you ever thought possible.
It’s likely that a great savings plan for your child’s college years will combine a number of different strategies on your part. Not every saving strategy is going to be the best fit for every parent. But as long as you’re getting started early you’ve got time to find the best fit.
Image: Flickr/Seven Morris
Author Lindsey Paho is an advocate for online learning and writes on behalf of 
