Starting To Save For College When You Have a Baby
Disclosure: I’m working with Fidelity Investments and MEFA to spread the word on the U.Fund Dreams Tour. All opinions are my own.
So you're having a baby! In addition to baby registries, childbirth classes, and doctor appointments, you also need to worry about finances. Having a baby can certainly be expensive, and it's important to be prepared and think through things in advance. While starting a college fund may be the last thing on your mind (18 years definitely seems like a long time away), college prices are constantly rising. Being prepared for the cost of higher education is essential, and if you are just having a baby now, time is on your side. The earlier the better for any sort of saving plan. Here are my tips for starting to save for college when you have a baby
Tips for Starting to Save For College When You Have a Baby
If you start your college savings early, you'll have the advantage of time with your investments. Even if you don't have much discretionary money to put in a college savings account, start small. Try to open an account when your children are born so that you'll have the full 18 years to save.
Take advantage of dollar cost averaging by regularly investing. You can also use cash gifts that your children receive to add to your college savings plan. Check out this post to learn some tips for finding money in your budget for college savings.
Understand the Costs
Before saving for a goal, you always need to know approximately how much you'll need. Fidelity Investments has an online calculator that you can use to get an understanding of college expenses – even well into the future! It can be an intimidating amount to look at, but if you just had your baby, you still have plenty of time.
If you live in the New England area, check out the UFund Dreams tour, where you can visit an interactive exhibit that can help answer all of your questions about college savings. The UFund Dreams tour visits lots of family-friendly festivals and events throughout the summer and fall, so it's likely to come somewhere near you. I recently saw the tour at the Cambridge River Arts Festival earlier this month.
To learn more about MEFA, visit their website.
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