I don’t have a very substantial savings account for retirement.  When I worked before my daughter was born I contributed to my 401(k) like clockwork, but when I came home to be a stay-at-home mom I rolled my funds into an IRA and then let it sit there.  It’s been bruised and battered as the stock market goes up and down, but I haven’t bothered to add any more money to it at all.  Every year around tax time I tell myself I’ll get another IRA going, but I never do it.

On the other hand, both of my kids have college savings accounts that have been in place since they were each three months old.  We have automatic payments every month that go directly from the checking account into the college funds without fail, and slowly but surely the balances in their college funds have started to rival what I have in my retirement account.

Although I know that we’re supposed to save for our kids’ college educations, I also know that I’m not really going about this the right way.  The simple truth is this: My kids can borrow money to go to college, but I can’t borrow money to go into retirement.  If I stay the current course then my kids will go to college with no financial worries – if they choose to go to college – but I’ll be in the poor house when retirement rolls around.

Here is what I should be doing instead: I should automatically contribute to a retirement account for myself while also contributing to my children’s college funds.  Although this will reduce the amount of money they will eventually have to pay for their college educations, it will ensure that I have enough money to fund my eventual retirement.

By the way, if you’re worried about my husband’s retirement fund, don’t.  He’s been contributing 10% of his income to an employer-sponsored retirement account for as long as I can remember.  Apparently I’m the only one in the family who isn’t prepared for the future.

If you’re a stay-at-home parent without an income you can look into a Spousal IRA, but if you’re like me and you’re employed then you have plenty of options for retirement accounts.  Should you save for your baby’s college education? Yes, you should, but you shouldn’t disregard your own financial needs for the future too.

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In America, President Bush and the Congress have decided to boost the economy with a tax rebate to all tax-paying Americans. While the details of the “economic stimulus package” aren’t finalized yet, the current amounts bandied in range from $600 per individual, $1200 for a two-parent household, and an additional $600 for each child.

This means that a household with two parent and two children would receive $2400.

However, before you decide that the part of the economy that really needs stimulating is the big-screen T.V. section of Wal-Mart, this is the perfect opportunity to put that money to a very good use.

Why not take this opportunity to start a college fund for your children?

When most people think of a college fund, they think of a bank account. There is a much better option available to residents of most states these days…state college savings plans.

These plans allow you to contribute monthly (with the monthly contribution determined by several factors, including what you would like the final amount to be and how long it will be until you need it), and contributions are tax-free. These plans also lock in the price of college tuition at today’s rates.

That means that you can lock your toddler’s college tuition price in now, and even if it increases by 1000% before your child reaches college age, you won’t have to pay that amount. To put it mildly, this is a fantastic deal.

To learn more about college savings plans visit the information page Sallie Mae has set up here; for a list of available savings plans you can take a look at this .pdf file.