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. If the child does not use the money for higher education by age 30, he or she can change the beneficiary to another child in the family.