Set Up a College Savings Plan in 90 Seconds or Less

college savingsCollege expenses are rising at an annual rate of 5 – 7%, making it increasingly difficult for the average American family to afford many of these high-priced institutions. College savings plans are a great way to begin saving for your child’s college expenses, and setting up a plan can be done in as little as 90 seconds.

College savings funds such as 529 Plans and Coverdell Education Savings Accounts (CESA) provide a tax-free advantage on earnings generated by the funds, and are among the best choices for families looking to invest for college expenses. Additional college savings programs can be explored at websites such as www.collegesavings.org.

Allocating funds on a monthly basis is the best way to build a college savings plan. And with automatic fund transfers available for most investment plans, there is little to do once the fund is set up but to sit back and watch it grow. Calculate the amount of available monthly funds that can currently be used towards a college savings plan. As you pay off outstanding debts, or experience other positive changes in your monthly income, plan on using the money you previously saved towards these debts each month to increase the amount being placed into the college savings plan.

Once you have your decided on your monthly allocation, the type of fund you wish to set up, and the financial institution you want to manage your fund, actually creating the account can be quite simple. It involves filling out a detailed application, paying the enrollment fee (if applicable), and transferring your first investment contribution.

Giving your children the gift of an unlimited future is not strictly for the very wealthy. With a little determination, discipline, and planning, you can easily set up an effective college savings plan to ensure your child gets their turn to wear that cap and gown on graduation day.

 

This article is for informational and educational purposes only.  It is not intended to provide legal, tax or financial analysis.  Please consult your attorney, accountant or tax advisor if you have legal, financial planning, or tax related questions.

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This article is for informational and educational purposes only.  It is not intended to provide legal, tax or financial analysis.  Please consult your attorney, accountant or tax advisor if you have legal, financial planning, or tax-related questions.