Saving money for your child’s college education is harder now than ever, given the sorry state of the U.S. economy and the credit crisis.
You might think college education savings for your child are not as important as paying the mortgage or even saving for your retirement, and you may be right about that. But even if you’re like most of the rest of us and you aren’t rich enough to a trust fund for your kid’s college education, there are ways that you can set aside a little money here or there that will build into a nice college fund by the time your child reaches 18.
With that in mind, here is one way a parent can save money for a college education.
Saving Money For College
Here are some steps you can take to get you started saving money for college.
Savings Account – Start a savings account for your child that will serve as his or her college fund. You don’t have to pay huge amounts of money into this account. Try to put some money into it every quarter and stick with that plan every 3 months until your child reaches college age. Even if you can only save a thousand dollars per year, with the money you build up and the interest accrued, you’ll have a nice starting college fund for your child. Try your best to save $250 every quarter, so you can save $1,000 a year for college education. $250 every three months might sound like a lot in this economic environment, but you need to save $80 a month or about $20 a week to scrape together this money.
Set up a savings account with heavy restrictions on when and how often you can withdraw funds. This not only gives a disincentive for you to raid your child’s college fund, but it also allows you to negotiate a higher interest rate from the bank.
Targeted Investments – Another option is to give the same money to an investment firm or bank which can make smart investments for you, which might pay a higher interest rate than a savings account. Like the savings fund idea, periodically place money into this investment fund.
Trust Fund – I’m assuming that someone who can afford to set up a college trust fund are probably getting their financial advice from a paid financial adviser, but you never know. Set up a trust fund that is tied to your child’s education. When they reach college age, the child will only be able to touch the funds to pay for college tuition or some other form of career training, and the trust fund recipient won’t be able to touch the funds unless they can prove they are enrolled in college.
Save For College On Your Own
Sometimes, parents are unable or unwilling to pay for a child’s college education which will require you to save for college on your own. I understand there might be a teenager or high school student who is trying to figure out how to save money for their college education. If that’s the case, then the equation is a lot different than a parent saving for up to 18 years for the same thing.
To begin with, you’ll need to take jobs around your own secondary school schedule. Have an afternoon or night job and certainly get a summer job. Don’t just blow every bit of this money, but save as much as you can in a savings account that draws interest. The concept is the same as the long term savings account. You’ll need as much money as you can get to start college, so every little bit helps.
College Savings Options
Other college savings options besides working minimum wage jobs or part-time jobs is to make money from the internet. Now, Google AdSense and most affiliate marketing programs won’t let you sign up until you’re 18, so the easiest way to make a little extra money online isn’t open to you. But that doesn’t mean you can’t prepare to become an affiliate marketer or benefit from Google Ad Sense. Buy a few cheap domain names and web hosting for a few websites, then use extra time to build each of them into as large a site as possible. Let these websites “age” on the internet, because sites that are a few years old are likelier to make more money through adsense and affiliate marketing programs.
Then, the day you reach 18, apply for each of your websites to join Google Adsense and any affiliate programs that make sense.
Once you’re in these programs, you’ll get money for people clicking on ads that appear on your website. The money you make might not be much, but then again, it might be. Either way, the great thing about these little side ventures is that you don’t have to be working on them to make money. You’ll be making money while you’re at the movies, while you’re in your college classes or while you’re at your day job. You get a check from Google (or some other internet company) every month. Teenagers might not think it, but they have a lot more time on their hands than most adults do, so if you have even basic levels of internet savvy, consider setting up websites that can make you some money in the years ahead. Write a website about something you like and see where it takes you. Makes several websites, so you don’t have all your eggs in one basket. While you won’t be saving for college, you’ll be creating an asset that can help pay your way through college once you reach the age of 18.