Sending your children off to a good college is something that many families strive to do. Although paying for college is not easily done. For the 2010-2011 school year here are the average costs of college in the US
Public in-state 4 years: $16,140
Public out-of-state 4 years: $28,130
Private 4 years: $36,993
With many children wanting to be Doctors, Lawyers, Engineers and many more high paying professions that require 6-10 years of schooling. Seeing these numbers it looks to be impossible to send your child off to school but that may not be true.
The key to paying for college is to plan for it. If you start planning to pay for your child’s college when they are a baby that gives you 18 years to save and prepare. Here are a few saving options.
Savings Options
| Amount Saved Per Month | Number of Years Saving | Interest Rate | Total Saved |
| $50 | 18 | .15% | $7,425 |
| $100 | 18 | .15% | $14,850 |
| $200 | 18 | .15% | $29,701 |
| $500 | 18 | .15% | $74,252 |
| $1,000 | 18 | .15% | $148,505 |
Personally setting up a college savings account is a great way to plan for the future. Even with low interest rates placed on savings accounts it’s still a great way to plan for your child’s future. Saving as little as $50 a month which is $12.50 a week results in $7,425.00 to put towards sending your child to college.
Other great saving options are
- 529 College Savings Plan
- Whole Life Insurance based College Savings Plan
- Bank CD
- Money Market Account
529 College Savings Plan- is designed as a college fund saving tool. There are two kinds of 529 savings plans, College Funding Plans and Prepaid Tuition Investment Plans With 529 College Funding Plans you select a portfolio of investment options, how much to invest and when to withdraw. 529 is state run and designed to place your savings into various investments. 529 Prepaid Tuition Plans are designed by the government where a number of contributors place money into a pooled fund. The upfront contribution is also given a contract that states a minimum pay out when your child is ready to attend college.
Whole Life Insurance based College Savings Plan- is designed similarly to a life insurance policy, but you receive benefits while you are alive. Life insurance money has a lower tax rate and when a stable return on your investment, establishing this for a College Savings Plan is another way to plan for the future. ADT Home Security is the easiest way to protect your investments.
Bank CD/ Money Market Account- both a CD and Money Market Account are designed for long term investments. CD’s are set up with a certain time that they can’t be cashed. For example 5, 10 or 20 years you can’t get your money from them. CD’s are set with a high interest rate in return for not having access to your money for an extended period of time. Money Market accounts also have a high interest rate but they allow you to withdraw money 6 times a month and often there are rules placed on how much money can be present in the account at any given time.
There are many ways to plan for your child’s future, start early and stick to the plan of your choice!
