These days you can conceivably spend six figures on college tuition for your child. It's a good idea to start planning for your child's education as soon as you can. The best way to do this is by setting up a savings account specifically for tuition that will earn you interest over time.
Instructions
1. Open up a savings account with your bank solely for your child's education. You can forgo the savings account if you'd like and enroll in a state 529 college savings plan (see resources). These are state-run college savings plans that offer returns similar to a savings account and are tax exempt. That means you don't have to pay federal tax on these savings if they are used to pay for college tuition.
2. Decide how much money you would like to set aside each month for college and start saving as early as possible. Putting away between 100 and 250 dollars per month can generate between 30,000 and 90,000 dollars over a 17 year period, depending on returns. However, even if you can't put away that much money each month every little bit helps, so try to put away something.
3. Contact your bank and set up an automatic transfer. This can be done in a matter of minutes and it can really save you a lot of banking time each month.
4. Plan on supplementing your savings with other forms of payment. It isn't practical to pay for four years of college all on your own so look into financial aids and loans to help relieve some of the burden.
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