ave for a College Education

As families struggle to meet daily expenses, saving for college is often postponed. Squeezing money from your budget for a college fund is not easy, no matter what type of salary you command.

The sooner you start saving, the better off you will be. So, why not start on your child’s first birthday? Save an established dollar amount each month or year. Depending upon the average annual return over 18 years, the amount can be a significant contribution to your child’s college education. As your family income grows, increase the amount put into savings each month or year.

Historically, stocks have been a good way to build savings in the long term, but with the volatility of the market they can be risky. The expectation is that the risk will smooth out over the years. Bonds are another option; just make sure to note the maturity date.

The cost of attending four years of college can be offset by federal, state and private grants and loans. Investigate these options even if you think you make too much money to qualify. Many companies match an employee’s 401(k) contribution as long as the contribution meets a designated minimum threshold. Make sure you contribute enough to your plan to ensure you receive the employer’s contribution. In the event of an emergency withdrawal of funds, the employer’s match invested in your account should exceed any early withdrawal penalties.

Another wise money management policy is to pay off credit card debts to avoid paying interest that can be used toward a savings plan.

Paying for a college education requires critical thinking and wise planning. Safe investments that yield low returns will not generate the growth you need in a college portfolio. A financial planner may be able to assist you in developing the portfolio that meets your needs.

Visit the College Foundation of North Carolina site at www.cfnc.org. Learn about the savings programs that are available to you and investigate their tax advantages.