College Planning

5 Little Steps to Start a College Fund for a Baby

These five little steps could help you start a college fund for a baby which can help help secure peace of mind for you and secure higher education for your child.

College For Baby

1. Get an idea of what your child's education will cost in the future.

Given a five percent annual rate of inflation on college costs, your child's college tuition, room, and board could easily set you back twice (or even thrice) what you paid for your own college education. You can get a more comprehensive idea of what both two year and four year private and public universities (in-state or out-of-state) will cost in the year that your child will enroll from The College Board's College Costs Calculator.

2. Calculate the costs of raising a child (or two).

If you're an expectant parent, you might not have a fully-fledged idea of what the costs of regular child care, food, and other necessities will actually run you on a monthly basis. The USDA has a handy Costs of Raising a Child Calculator that can give you some solid numbers. Their calculations are based on data generated from their 2013 Expenditures on Children by Families report.

3. Start a 529 College Savings Plan.

Once you understand what your children's education will cost, and how much having a child will cost you, you'll probably have a good idea of how much you can allot to their college savings each month. A dedicated 529 Savings Plan is one of the most tax-beneficial and efficient ways to build a college fund for baby. If you choose to set money aside in a regular savings account, you could be missing out on tax benefits on baby's college savings.

4. Give yourself a refresher on financial aid lingo.

It may not seem particularly urgent, but you should familiarize yourself with contemporary financial aid lingo and make an effort to understand how the college application process works. It's good for parents to have a thorough understanding of what kind of financial aid options are available to both them and their children, just in case that 529 Savings Plan doesn't actually fund itself in 18 years' time, or baby doesn't turn out to be an actual baby genius.

5. Inform your family about the best ways to contribute to baby's college fund.

Doting grandparents, aunts, and uncles might be anxious to assist you with plumping up your baby college fund. If they express an interest in contributing, be sure to inform them about the most tax-beneficial ways to gift money for college. And don't forget to deposit those personal checks into your college fund for baby when birthdays and major holidays roll around.

If you'd like to learn more about starting a 529 College Savings Plan for your baby, or you'd like to ensure that you're not saving for college the wrong way, there's a ton of helpful college-planning info on offer in our Protective Learning Center.

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All Learning Center articles are general summaries that can be used when considering your financial future at various life stages. The information presented is for educational purposes and is meant to supplement other information specific to your situation. It is not intended as investment advice and does not necessarily represent the opinion of Protective Life or its subsidiaries.

Learning Center articles may describe services and financial products not offered by Protective Life or its subsidiaries. Descriptions of financial products contained in Learning Center articles are not intended to represent those offered by Protective Life or its subsidiaries.

Neither Protective Life nor its representatives offer legal or tax advice. We encourage you to consult with your financial adviser and legal or tax adviser regarding your individual situations before making investment, social security, retirement planning, and tax‐related decisions. For information about Protective Life and its products and services, visit www.protective.com.

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College Fund For Baby

Saving for your baby's college education means starting early. This article looks at how you can start a college fund for your baby with these five little steps. Starting a college fund for a baby is a smart financial decision. Starting a college fund for a baby today will help secure peace of mind for you, and secure higher education for your child. For more information, visit the Protective Life Learning Center.

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