Start Saving for College
By the year 2021, four years at a public university may cost $128,000 or more; the tab for four years at a private university could be as high as $304,000. The prospect of paying for this may be so overwhelming that you can't even think about it.
But don't let denial keep you from starting to save; the earlier you start, the more time there is for your money to grow, says Kevin Neumark, executive vice president of the Concord Equity Group in Miami.
Don't rule out stocks, even with the recent slump in returns. The Standard & Poor's 500 Index, a widely recognized measure of stock market performance, has grown 471 percent over the past 18 years -- a timeframe that includes the recent downturn, says Neumark.
"What's more, if you pick solid investments, you could be buying in at a bargain," says Lerner.
You may want to consider a 529 savings plan, a state-sponsored mutual fund that allows you to invest in the financial markets for the exclusive purpose of saving for college. You only need $25 to open an account in most states. Your money grows tax-free, and you may also not owe taxes when you withdraw it. Every state sponsors such plans; you're not limited to your state's plan, but there may be tax advantages to choosing it. For more information, log on to savingforcollege.com.
Another option is opening a Coverdell Educational Savings account. Coverdells offer a wide range of investment options, including mutual funds, stocks, and bonds. In addition to college tuition, they can also be used to save for elementary and secondary school expenses.
Brett Graff, a mother of one daughter, is a writer based in Miami.