Automatic deposits from each paycheck into an investment account offer the best way for parents to ensure they will consistently contribute to a college fund. The younger the child, the less parents need to annually invest and the more risk they can take when investing. A financial services professional is a good resource for developing a college investment plan. Teaching children to save . Once children understand the concept of money and start getting an allowance, it's time to teach them about long-term savings goals.
College is an ideal long-term savings goal.
Parents can encourage saving for college by matching a portion of their child's savings. Getting help from Uncle Sam . The new Education IRA provides tax-free advantages for money invested to pay a child's higher education expenses. Anyone can contribute after-tax money into an Education IRA for a child under age 18. Gains are tax-free if they pay for higher education expenses before the child turns 30.