Sunday, March 1, 2009

The most important things to consider when saving for college

By Nicholas Hall

Probably the most important thing to know is that saving for retirement is far more significant then saving for college. So under no circumstances should you reach into you hard earned and hard saved retirement funds. There are plenty of sources your children can use to get some extra money for college if they need it; it is much harder to get that kind of help when you’re older.

Obviously, the sooner you start to save the better, so get on it as soon as you are able. The best kinds of investments for your college portfolio are stocks. With tuition costs rising faster than inflation, a portfolio tilted toward stocks is the best way to build enough savings in the long term.

Another thing to remember is that you don’t have to save the whole 4 year amount; federal, state, and private grants and loans can bridge the gap between your savings and tuition bills. Also, 529 savings plans are a good way to save for college and they offer great tax breaks. The approval process for college loans is more lenient than for other loans so don’t worry about being able to make up that last little bit toward the end. Taxpayers with student loans get a tax break as well; so don’t be afraid to see what is out there.


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