Saving for a College Education
by Jan Lehrtl
http://www.faqeducation.com
Since getting a college education is important to so many
people, and since the cost of getting a college education
is steadily rising, most families will need to plan for
education expenses well in advance of their children
attending college. Often, parents will begin saving for
college at birth. Many families receive help from grandma
and grandpa to fund their children's college educations.
If you have children, and you want to fund their college
educations, the time to start saving is now!
What is your risk-aversion? How much time do you have
until you need funds available? Where do you see your
child pursuing higher education? These are the kinds of
questions that must be answered when shopping for
investment vehicles. Decide whether you prefer a slow,
reliable, and no-risk option like savings bonds, or you
can tolerate the risk that accompanies potentially
high-yield investments delivering 20-100% returns per
annum.
You may wish to make monthly deposits into a mutual fund.
These payments can be automatically deducted from your
paycheck each month, and many people never miss that money.
Over time the interest compounds, if left untouched, and
the investment will grow steadily. By the time you need it,
there should be a nice nest egg for your child~s college
education.
Family and close friends could be encouraged to sometimes
give monetary gifts to your children rather than gifts of
other kinds. Younger children and teens aren't likely to
appreciate this, but they likely will when they see how
those gifts mature over time to provide them with more
educational options.
Teenagers often work during summer breaks. The money
earned through these summer jobs can go a long way in
adding to the college education fund. Since the
contribution would be through their own toil and hard work,
they would be interested in doing well at college and would
take their education seriously. This would also give them
a sense of pride and achievement. Best of all (to your
teen), $1,000 can easily be saved in a single summer
working eight to ten hours a week at eight to ten dollars
an hour, and leave plenty of time and enough money for
leisure pursuits!
Are you still a little short on funds now that it's time
for your teen to go to college? It~s not too late
to apply for scholarships, grants, and loans. Have her
fill out the FAFSA form which will determine her
financial aid eligibility at all participating institutions
of higher education in case she transfers to another
campus later. This form can be readily obtained at the
college's financial aid office.
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