For College

Saving For College

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-If you dream of sending your little one off to college someday, you better start saving now. -You know, the biggest mistake is not starting early enough. The earlier you can start the better. -Stacy Francis, president of Francis Financial in New York, says parent should start saving for their child's college education as soon as the child is born but don't just put the money directly in your child's name. -And when it comes to filling out the facts on applying for financial aid, that money sitting in your child's name is going to be held directly against their chances of getting a new type of financial aid. -Instead, set up a 529 Plan. -The 529 Plan is a special type of investment vehicle that can be used for college savings, and what's great about it is that you can use that money for any accredited college. 529 Plans are easy to open and every state has one but not all plans are created equal. When choosing a 529 plan, Stacy says do your research and don't just automatically go with your state's plan. Some states offer a tax deduction for contributions you make to the plan, while others do not. And different plans offer different investment options. -Stacy says to start by going to the website The site ranks all the different 529 Plans out there and features like a college cost calculator, tutorials, even a state-by-state search tool let you explore all your options. -Catherine Sachs and her husband opened a 529 Plan for their son Dylan when he was born. -For us it wasn't no brainer to do it because you know, with the cost of education being what it is these days, we think that it was better to start sooner rather than later. -Since they planned to have a second child, they started another college fund with an investment firm at the same time. When Caroline was born 3 years later, they made her the beneficiary of the second account. -She was actually given a head start because her college savings plan actually started at 3 years prior to her actually being born. -Catherine and her husband have contributions to their children's college fund, taking automatically from their checking account each month. -Some parents, they say, you know, we'll just do it at the end of the year but what happens for a lot of them is at the end of the year they look at their finances especially if it's around holiday season and they don't have the money. So, if you do it on going automatic direct deposit from your paycheck or you could have it directly from your checking or savings account, it's gonna be a lot less painful. -But be careful when choosing how much to contribute. -Deciding how much is really one of the most difficult decisions. It's deciding along with it. Do I wanna afford a 4-year state school versus a 4-year private college? And then also, you know, do you want your child to take allowance? So, if they're having to choose between them retiring and their child taking out student loans, it makes sense actually for their child to take out student loans. Don't put too much of your money away because you can't get that money back. So, put ***CUT DICTATION***