Saving for College-Starting NOW!
When fellow blogger Tamsen Butler mentioned a baby who was getting professional pedicures once a week, my first reaction was: ?Wouldn?t it be better to take that $10/week and put it away for college??
Call me crazy, but I believe it?s never too early to start saving for college! Average college costs for a private, four-year school in 2007 ? 2008 are just under $24,000 (per YEAR), and academic scholarships are getting harder to come by. I know, because my niece and nephew are both entering college as freshmen next semester, with excellent grade.
Here?s a sobering fact? if you forego your $4/day latte habit (assuming you have one), or cut some other luxury out of your budget in order to set aside $4 day, in 18 years (not counting interest) you will have $50K in the bank.
Our baby isn?t even born yet, and this is on my mind. Along with buying diapers, paying off our car loan, saving for a house, investing in cord blood banking? all while maintaining my work-at-home status. Yes, kids are expensive.
My husband and I are both leery of conventional college savings plans, such as a 529 account. If your child doesn?t go to college, for whatever reason, and there?s no one else you?d like to name as beneficiary, you could face hefty tax penalties when you try to withdraw the money for another use.
Once we get past the initial ?first-year? childcare expenses, we will look into other savings and investment options and start a long-term account on her first birthday, if not sooner!
But I have already started a ?upromise? account, which places cash rewards into a college savings account based on purchases I make. It?s the same situation?if our child doesn?t go to college, we would have to name another beneficiary or lose the money. But since we?re not actually investing our own money into the account, we have nothing to lose. If I had to give the money to a relative, or even a close friend?s child, or find a way to donate it to a scholarship fund, I wouldn?t mind.
Granted, the savings doesn?t add up quickly. My sister noted that she received 10 cents in my nephew?s account for buying a bottle of ketchup. But with 19 years of spending ahead of us, I?m expecting we?ll earn enough to pay for books, at least. A whole year of college or even a semester? Eh. I?m quite realistic in my expectations for the program?that would be a lot of ketchup!
But free money for college? Just for shopping at stores and Web sites where I normally shop, buying things I normally buy, and eating at restaurants we love? I?ll take it.
I?d love to hear your investment ideas for college savings. Readers, how early did you start saving for your child?s college education?