Save For Your New Family

How To Start Socking It Away For College

Open a 529 account.
These state-sponsored tuition plans earn interest tax-free. They're backed by the state government but don't require your child to attend an in-state school. You're free to invest in any state's plan (be sure to compare tax advantages carefully because they vary). Visit for more info.

Decide what to save.
If you put $10 a week in a 529 plan that seeks stock-market returns from the day your child is born until she's 17, you could have close to $14,000. If you can part with $25 a week, you could have $34,000. And a $100 a week will net you nearly $300,000. Pick a doable amount for now and gradually increase it.

Stick with it!
"Once you've decided what percentage you can put away, make it a regular routine by having the money automatically withdrawn from your bank account," advises Lisa J.B. Peterson, president of Lantern Financial, in Boston. But never let saving for college trump your retirement saving.

Little Ways To Save Big

Give yourself a bonus with these creative ideas.

Commit 50 percent of every windfall.
Whether it's a tax refund or lottery winnings, earmark at least half for your child's 529 college savings plan. Use the next 30 percent to pay debt or bills, make a home repair, or tackle other necessary expenses, advises Chris Kimball, a financial planner with Prudential Financial's Northwest Financial Associates, in Lakewood, Washington. Blow the final 20 percent guiltlessly on dinner out, a vacation, or another indulgence.

Have a yard sale.
Sell your child's gently used or unopened gifts, toys, and clothes once a year at a yard sale or through an eBay store, and add whatever you earn to your family's tuition fund. The Petersiks raked in $425 at their garage sale last summer.

Shamelessly ask for a little help.
Let grandparents and other relatives know that you've opened a 529 plan. If they're considering a cash gift for the baby, ask them to make their check payable to the plan so the money can grow tax-free. In some states, this might disqualify you from getting the tax deduction; find details about each state's plan at

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