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College Savings – Question 4 – #FLMonth

by Don Current on April 4, 2011

So, where do your college savings stand?

Have you started yet?

When do you think is the best time?

Question: You should begin saving for your child’s college education…

A) When they start Kindergarten
B) When they are born
C) After your own retirement plan is in place and being funded
D) When you first think about having children

So, when IS the best time to start your college savings? Any input on how much you should save these days?

  • http://profiles.google.com/brandon.current Brandon Current

    We have used the 9 months of pregnancy to save up a sizable starting chunk to invest when our little girl is born. It has also helped to get used to that much money being gone out of the budget each month for the new expenses when she arrives!

    We are investing it in a regular, taxable brokerage account so that we don’t have to worry about changing laws and possible government influence on how or where it gets spent.

    • http://www.currentfinances.com Don Current

      It’s definitely a good idea to just keep setting that money aside now that you’ve gotten used to it!

      Once you get settled in with the new baby and know how much extra you actually need for your budget, you should think about putting the extra in an ESA or a 529 plan. Both of those investment types are specifically for education expenses. They operate similar to a Roth IRA where you pay tax on the money before you deposit it, but the earnings are not taxed as long as they are used for qualified education expenses.

      These are both fairly low risk as far as government involvement. At worst, tax laws could change such that you woud have to pay tax on the gains, which you would have to do in a standard taxable brokerage account anyway. Of course, when we’re talking the government, who knows what could happen! That’s pretty much true of ANY money you have though.

      Also, I’m not sure how this all works with you being overseas. You probably have a much better handle on that aspect than I do.

  • http://www.leadershipequip.com/ Brent Green

    I’d say prior to birth. We just started a college savings account this month for a child that is yet to be born or conceived :)

    • http://www.currentfinances.com Don Current

      That’s awesome Brent! Sooner is always better when it comes to investing.