Pregnancy Diary

This is the very best time to realize that you should start saving for your baby’s eventual college education. You have many years before your Little Genius starts comparing different options for college.

Suppose you only put $30 a month away in your baby’s college savings account, but you do it from the month your child is born. $30 is an amount that most people can manage easily and without really missing the money at all. That $30 per month over a period of eighteen years will grow to an impressive amount, even at a modest rate of return. For example, at an interest rate of 4%, the $30 a month will grow to nearly $9500 in eighteen years. That’s an impressive amount of money for a monthly deposit that you probably won’t even notice being gone from your expendable income. You’re earning money on money you’ve already earned. This is how even the most modest savings account can grow exponentially over the years.

If your income allows, you can always increase the $30 to $100 a month and you’re child’s college fund will be close to $32,000 by the time he graduates from high school.

Be sure that you put the money into an account that is specifically designed for college savings because there are tax advantages to these accounts. You have plenty of options available to you – such as educational IRAs and state-sponsored prepaid tuition programs – so be sure to do some research and speak to a representative at your financial institution to find out which option is best for your situation.