Saving for College - Denton,TX

Wonderful that you are starting now! Even a little bit -- $10 - $50 per month -- will grow with compound interest to an amazing amount. Keep up the good work.

C., starting early to save for college is a very good plan. You could let grandparents and family know that you are starting a college fund for the children also and they may wish to contribute in lieu of birthday and christmas gifts ( or purchase a small present for the child to open and put the rest in a college fund) You could also designate that a % of any future raise or any overtime goes into the fund. You probably have been paying money for diapers - that may already be in your budget. When the kids outgrow the diapers, continue to designate that money for their college funds. Good luck!

We use a financial planner to help us determine how much will be needed by the time that child graduates and budget accordingly but for ultimate flexibility we keep the funds with our other investments. And college savings is low on the savings priority list - we are definitely saving for our own retirement first.

Talk to a financial planner if you are debt free. If not, buy Dave Ramsey's Total Money Makeover.

Do a Google search for Clark Howard, he has great info about accounts for college savings. In his information he advises using a Roth account, the funds are tax free, your contribuitons can be drawn out for any purpose at any time in case you have an emergency, but the interest earnings must be left there for "retirement" age withdrawal. A 529 account locks the funds for college only. For me, that is too restricting, I prefer the Roth because it is much more flexible. Do more research, and Kudos to you for starting this savings for your kids at such an early age, that's a great thing. (^_~)

I agree with opening a 529 plan. The proceeds can be used for any higher education expenses, such as housing and books, as well as tuition at private and state universities, jr colleges, or even trade schools. Each state may have different adavtages for their own state schools, but the investments are different from state to state. Morningstar and Kiplinger both have reviews for the different states plans.
One hitch, when you open a 529, you open it For the Benefit of your child but you own it and the proceeds can count against you for needs based grants and scholarships. If you can, have a grandparent that you trust open the account (you will still be able to contribute) so that you can take full advantage of all the opportunities available.

You can create a 529 account. This is sort of like a 401K plan, only it's used for your or your designated relative for school expenses. If the child chooses not to use it, you can get designate another person for (like another child or relative), or you can cash it out. Like the 401K, however, if you cash it out instead of using it for education expenses, you do take a tax penalty. Just google "529" and your state's name to find out more. Also, if you're not impressed with your state's plan, you can sometimes enroll through a different state, with a better plan.

Also, try talking to your bank--most banks have financial planners that can help you start a college saving account, and offer you different options.

dave ramsey has good ideas on this, but there are other opinions too, so here are both sides...

http://www.daveramsey.com/article/saving-for-college-is-e...

http://www.moolanomy.com/413/dave-ramsey-college-savings-...

The good thing is that you are starting now.

If you are not a numbers person, follow the market, investment plans, etc, I would suggest a financial planner to consult you so you can choose the best option for you.

We started when our almost 16 yr old daughter was born. We are very much numbers people and have strong financial goals. Our goal was to add $10,000 per year by her birthday. Some years, we added more to make up for any losses in the market. Right now she is fully funded and we are oh so glad we've been disciplined and diligent regarding savings. My kid wants to study in Italy and we are currently searching colleges with sister colleges in the cities she wants to study.

Of course, she does not get a complete free ride..... she works for our family business and contributes.

As you probably already know, make sure all the eggs are not in the same basket. We have a 529, coins, savings bonds and regular savings.

The good part is that you are thinking about this now and getting started. It does not matter how much you contribute as long as you are doing something.

Best wishes.

by bonds.. they don't make a lot of interest.. but they stay there and you don't touch them.. i have lots of bonds for both of my kids.. they also have disney stock which again doesn't make much interest.. but it's still good to have.. good luck..