College savings plans
So we all know that college is extremely expensive. We also know that it is extremely important for almost everybody if they want to have a lucrative career. This is not always the case, but most people who make descent incomes are college graduates. Those who serve in government or education have college educations. Furthermore, and perhaps most importantly, college is a very important experience. It is something that can shape a person's character. It can teach amazing life lessons and provide young people with knowledge that enriches their lives. Many people don't think about college as worthwhile just for the sake of the learning, but it is. It tends to make better citizens and more concerned people. So how will you make it happen for your child? You might be particularly concerned about this if you never went to college and would like your children to have an opportunity that you did not have. Many people can just make ends meet. They don't have the wealth to be able to spend it on some sort of fancy college saving plan. Even if you try to save, you might feel like you could never save enough. Many private universities in this country cost as much as thirty or forty thousand dollars a year. Fortunately, many schools offer considerable financial aide to those who cannot afford the cost. However, this does not mean that you will not have to fit some portion of the bill. Believe that you can save for your child's future and you will be able to do so. There are college savings plans that will help you to save the money over a long period of time.
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One thing to remember is that your plan needs to fit your particular situation. Plans need to vary a great deal depending on the current age of your child, risk tolerance, and where you live and what kind of tax incentives there might be for it.
The 529 saving plan is what many people use. These are plans that are usually tax deferred. This can be a big incentive when it comes to choosing a plan. Often the money is not taxed when it comes out of the accoun to be spent on college related expenses. Some of these accounts have high costs and investors who try to increase total through aggressive investing. You might not want to invest in one of these, and especially if you have a bit of time. A low cost plan that you can sit on for a long time is probably the safest bet. Accounts such as the T. Rowe Price, Vanguard, and TIAA-CREF are fairly inexpensive and have ok performance over the long run.
The key with 529 plans will be to find a plan that gives you some great tax breaks and which is not too volatile. You will probably want to go with one of the big ones. Obviously nobody wants to gamble with the money for their childen's education. In a time with so much economic unrest you will also need to be very careful about accounts like this. Anything that could rise or fall dramatically with the stock market is dangerous. This is particularly problematic because if your child needs the money soon the problems with the market could affect you. You might want to consult a financial advisor to make sure that you are not investing in something that could simply loose large amounts of money. If so, consider other options, such as even a savings account for the time being.
