When Should You Start Saving for Your Child’s College Education?

college savingsWhether she is still crawling around the floor in diapers or strolling across the stage to pick up her high school diploma you never stop wanting the best life possible for your child. This is the person you love more than anything else in the world. You want to protect her, to teach her right, and to see her go on to a fruitful, rich future with her own family and great successes. It’s no secret that in this modern world of technology a college education is often the key to this bright future. But it’s also harder than ever to afford that crucial degree. Tuition rates continue to increase, while slashed educational programs mean there are fewer grants and scholarships to go around. You can always have your child enter work-study programs and take out student loans, but there’s nothing particularly thrilling about the idea of watching your child graduate college buried in six-figures of student loan debt. It’s up to you as the parent to plan ahead and pay for as much of that four-year program as possible. But when should you start saving for your child’s college education?

The quick answer is that you should start as soon as you possibly can. It is never too late, and you shouldn’t ever give up because you think you’ve missed your window. But if you can start putting something aside ten years or more before your child is going to head off to college you’ll be in fantastic shape. Start off by checking in with a financial planner. He’ll be able to lay out the specifics of each savings program, to determine which one fits your needs the closest. A savvy financial planner may also understand some loopholes you can exploit that will help you save even more money for your child’s college degree. But at this point time is on your side. Split your savings, so that 80% of it is going into equities and 20% is earmarked for fixed income investments. Try to set up a monthly contribution so this money is put aside automatically, and then add in extra as you can.

If your child is between five and ten years out from the start of college you still have a fantastic opportunity to put money away. If you’ve been investing this entire time you might want to revisit your strategy with a financial planner, just to find out if changing tax laws or new investment tools have popped up that you need to address. If you’re just getting started now, you’ll need to hedge your bets. Try to save a large amount of money each month, basically whatever you can while still getting by. But place that money in conservative investments. With time beginning to become a factor you won’t be able to recoup losses in time for your needs. So even though those conservative investments won’t return as much interest, you can rest assured the money will be there when your child is ready for school.

If your child is in high school, you’ve got to kick your savings plan into high gear. Get aggressive as far as the amount you save each month is concerned, but the same rules about risky investments apply. This is especially tricky if the market is in fluctuation, or if the recession continues and you’re afraid of the timing. But you should manage your investments more aggressively overall. Don’t just set an automatic plan and leave it be. Get involved with a fund manager, an accountant or a financial planner that can help you maximize the time and opportunity you do have. You’ll have to pay this person a bit of money, but the end result will be more than worth it when you sit down to review the Bachelor of Science in Nursing degree guide with your child and realize you’ll be able to foot the bill for this year’s tuition.