As a parent, you probably dream about your child graduating from college and hope it’s from a topnotch school. A college degree means your kid is out on her own and, you hope, out of your hair. That degree opens doors to better jobs, higher salaries, and more personal satisfaction.
Whether your offspring ends up at the University of California at Berkeley, Penn State, or Muriel’s Institute of Musicology, going to college isn’t cheap. To make matters worse, the price goes up at a frightening pace. As with retirement, sending a kid to college is one of the biggest expenses you’re likely to face.
Fortunately, whether you start saving for college before your child is born or when he or she is already into the terrible teens, you’ve got plenty of savings options. Section 529 savings plans, Section 529 prepaid plans, Coverdell savings accounts, Uniform Gifts to Minors Act accounts, and even taxable investment accounts can help you amass the small fortune you need for college expenses.
This chapter begins with a look at why saving for college is so challenging. Then you’ll learn about the tax-advantaged savings plans available and how to choose the one that’s right for you. And if you have more than one kid headed for higher ed, you’ll learn strategies for contributing to more than one college savings account at a time. Finally, this chapter explains how to spend those college savings once your little darlings start school.
When you ...