| If you're good at planning ahead, you may have
thought about it before your child was even born, perhaps while
you were shopping for a bassinet and teddy bears. At any rate,
you probably started thinking about it when your child was very
young. After all, it's one of the major responsibilities you
face as a parent: your child's college education.
Personal growth and expanded horizons are reason enough to
send a child to college, but there are more practical
considerations, too. College graduates have more jobs to choose
from, and they generally make more money than people who have a
high school education. That makes a college education very
important for your child's future.
Start Early, Early, Early
As a parent with an eye to the future you should start
early to save for your child's college education. College
costs have risen consistently for the past 10 years, and
there's little reason to think this trend will reverse itself.
Most cost estimates predict annual increases of 5%. What's
more, many people take more than four years to finish college
and some go on to postgraduate studies, so you may need to
save even more.
A child born in 1999 will probably start
college in the year 2017, when a private college education
could cost $54,000 a year! Of course, these are only average
estimates. If you have a specific school in mind, you may wish
to contact the school- now and when the anticipated date draws
closer -for information on tuition costs, how they have
changed and the trend for future increases.
Clearly, it helps to begin saving early,
preferably as soon as the child is born. The idea is to save or
invest as much money as you can and pay taxes on as little as
possible. It's like buying a house: the more you've saved ahead
of time, the less you'll need to borrow. Set aside or invest as
much as you can, even if it's just a small amount from every
paycheck.
Increase your contributions to the fund as
your salary increases. Add extra cash from raises or yearly
bonuses, as well as some of the money your child receives as
gifts. Money that comes unexpectedly and has not been budgeted
will not be missed. Also, if your older child has a part-time
job, encourage him or her to put some of those earnings aside
for college.
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