It is never too soon to begin investing in your child’s future. With time on your side, you can be more certain that you will be able to save enough money to get your child through school. Plus, if you get a plan with a decent interest rate, the longer you spend saving, the more interest you will be able to accrue.
Determine a monthly amount that you will be willing to contribute to the savings account. Perhaps, you and your spouse can each contribute half of an agreed upon amount. Reevaluate the amount you contribute as you begin to earn more money or get bonuses at work. Have automatic payments set up. If you don’t have to remember to make the payments, your plan will be much more successful.
Get the whole family involved:
Rather than having family members buy them expensive gifts for birthdays and holidays, have them make a deposit into the college savings account. When your child begins to work have them deposit paychecks in to the account. If you don’t want to force them to contribute their entire paycheck, have them agree on a monthly payment amount that you are both comfortable with.
Students can begin taking classes, such as AP and IB classes, that they can get college credit for. Have them look into taking more advanced classes that they can get credit for in college. The fewer classes they have to take, the less money you will have to spend.
Angela’s Teachable Moment: If they want to spend their money on something remind them that $50 towards clothes could be $50 towards college. Explain to them what interest rates mean and how they work so they gain an understanding of what $50 could become if invested. They will want to save for college and will gain financial understanding.
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