It Pays to Start Saving: 5 Ways to Get Started Now

http://www.savingforcollege.com/articles/it-pays-to-start-saving-5-ways-to-get-started-now-773

There's no denying that a college degree is one of the most important investments parents can make for their children. Whether you anticipate your child will attend a public in-state university or a private school across the country, that education will have a price tag. While saving 100% of what you need may be difficult, any savings will open options and reduce the need to take on student debt.

Just like saving for retirement, the sooner you start to save for college, the more time funds have to grow. Approach the savings process as a journey--one that should start as early as possible and could even start before your child is born. And the sooner you start saving – even in small amounts – the more you can chip away at that cost and get closer to your college savings goal.

Here are five tips to consider so you can start saving now:

1. Do your homework. Make sure you understand the savings options available and their benefits. Consider a 529 plan, a tax-advantaged dedicated college savings account that can be used for tuition, books and other education-related expenses at most accredited two- and four-year colleges and universities.

2. Open a 529 account early. A compelling advantage of this type of plan is that it can be opened before your child is even born. By opening it under your name, you can start saving immediately, with the option to change the beneficiary name later. Furthermore, it's simple to automate your college savings contributions so that regular monthly payments are transferred directly from your bank account, helping you establish healthy savings habits without thinking about it.

3. Expand your registry. Make college savings a team effort. Ask friends and family to contribute to your child's 529 account. In particular, 90 percent of grandparents say they'd be willing to gift towards a college fund in lieu of traditional presents . Added bonus: money contributed to a college savings account cannot be outgrown or create clutter in the family room.

4. Make gifting easy. The increasing popularity of online communities and social sharing has trickled into financial services. Companies that provide 529 accounts, like Fidelity, are now offering online gifting services that allow account holders to add a link to a personalized gifting page to share by email, social media or even in an e-card invite to a baby shower or birthday party.

5. Put your spending to work--and watch your savings grow. Take advantage of reward programs offered through credit cards, especially if they are linked to a 529 account. From gas fill-ups and groceries to vacations and day-care, families have another opportunity to boost their college savings fund as part of their everyday spending.

No matter how you and your family approach college savings, the key is to just get started. Even if you feel it's "too late", it's better to save a little than not at all. Taking the process one step--and one dollar--at a time makes the entire experience less intimidating, and as the saying goes, "every penny counts."

Investing involves risk including the risk of loss.

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¹Fidelity Investments, 2014 Grandparents and College Savings Study, June 2014