2012 Tips to Help You Pay for Your Child’s College Education
The cost of higher education of a child starts to trouble the parent, as early as the birth of the child. And rightly so, as the costs spiral each year and are reaching unattainable peaks. Rough estimates put the cost of higher education at $100,000 and above in public schools and one can simply double it for the private schools. It makes sense to start early so that one is not faced with an insurmountable task, when the child turns 18.
Create a college fund and start saving early. More important than saving, is aggressive investment of the savings so that one can create a substantial fund when the child is ready to go to college. If need be, the college fund can be supplemented with student loans, scholarships and other financial aid to pave a smoother path. Many parents let their saving lie in a savings account, adding to it periodically, it could be one of the safest ways to create an egg nest but it may not help to save the huge amounts required for a good education. Investing it wisely is important to help the amount grow rapidly over the years.
The stock market is a volatile option but also the wisest if one picks and chooses with care. Mutual funds with no load options are well suited to the need. Choose them carefully after adequate research and keep a tab on their performance annually to ensure that the money is safe. Start shifting these funds to bonds and other similar less risky proposition, a few years before the child is due to college, this will help minimize fluctuations to the fund.
Liquidate some of these stocks and bonds valuing close to the first year’s college fee, a couple of years before the child goes to college and invest the amount in a money market fund so that it is easily accessible when required.
When investing money for college funds, look for options that provide income tax benefits and relief.