Saving for College: Where Do You Start?

If you're thinking of getting a head start on college savings, you’ve got the right idea. The sooner you start, the less you’ll need to save overall, thanks to the power of compound interest. Getting started is easy, and here are four ways to kick things off right:

Set up a college savings budget. It’s okay to start small. Even $10 a week adds up to $9,360 over 18 years—and that’s without earning any interest. With a mere 4% return, you’d have $13,875. All for $10 a week.

Look for tax advantages. 529 plans are a great example. They’re specifically designed to help save for college, and can offer tax benefits that really help out when it comes time to pay those tuition bills.

Encourage loved ones to contribute. For occasions where the present pile gets out of control, try turning the focus toward the future. Kids only need so many action figures, and money in their college fund will do them good for decades to come.

Take advantage of programs like Upromise, a free program that offers rewards for things you buy every day. Over time, those rewards could add up to a big chunk of funds to use for college.

25AFS