InCharge Debt Solutions highlights eight strategies for parents to prepare for their children's college education, regardless of whether they have a newborn or kids in high school. "The key is to get started, develop a plan and take the initiative to make things happen, because as we all know, kids grow up before you know it," says Etta Money, InCharge's president.
"Studies have shown that kids with savings accounts in their names are six times more likely to attend college, so it is amazing that 58 percent of parents don't have a college fund established for their children," Money notes. "Just as alarming is a 2010-2011 College Board study that showed the average annual total cost of a four-year education is $16,140 for a state public college and $36,993 for a private nonprofit college, so a majority of dads and moms have a formidable savings task in front of them and are in need of a plan."
With that in mind, here are eight strategies for success:
1. Set a goal – you can't be successful if you don't know what you want to achieve and exactly what it will cost to get you there, but be realistic so you aren't tempted to give up.
2. Research and project – find out what it costs for the education you'd like to provide and then estimate the "time-valued" money you'll need when college years arrive.
3. Make it a family affair – get the children invested in the plan, give them savings goals and demonstrate that it is important to you as well as to them.
4. Be persistent – stick to the plan. Even if you have to cut back here and there, take a part-time job, or have a garage sale, don't waiver, it will be worth it in the end.
5. Don't steal from the cookie jar – whatever you do, don't tap the account thinking that you'll put it back later, because too often, it never happens.
6. Open a tax-deferred education account – whether you decide on a Qualified Tuition Program (529 plan) or a similar account, keep it separate from other money.
7. Monitor – watch your account just as you would your other money, and track your progress to be sure you are meeting your goals.
8. Make adjustments – if some of your original assumptions prove inaccurate, adjust them as you go along, but always add to the account, never subtract.
"It's important to stress that college savings should be done in addition to personal retirement savings, not instead of them, and the end of the school year is a great time to start thinking about your children's futures," suggests Money. "Hopefully, when the school bells ring later this summer, parents with college funds for their kids will be the norm and not the exception."