How To Plan College For Kids

When your kids are young, it can be difficult to look far into the future--to your child's college education. But college planning should begin when your kids are small and you can begin to save, plan and guide your kids in the right direction for college. More than just money, your planning efforts could mean the difference between a college graduate and a grown child who lacks direction and is confused about the impending future.

Step 1

Begin a savings plan for your child. Most states have educational savings accounts like 529 plans that allow you to contribute tax-free money to go toward your child's college education. Coverdell Education Savings Accounts allow you to contribute up to $2,000 annually and the earnings will gain tax-free interest when used on eligible expenses, according to msmoney.com. Roth IRAs can also be used for college saving, and you can contribute up to $4,000 per year, tax free. Contact your financial planner to find out which type of college savings will work best for your family.

Step 2

Avoid pressuring your child to go to a certain school or type of school, warns familyeducation.com. If you only talk about the experiences you had at your alma mater, your child may get the message that going to your school is the only choice for her. Instead, let her know that a variety of colleges and universities are good choices so she doesn't feel that she'll disappoint you if she doesn't follow in your footsteps.

Step 3

Enroll your child in various extracurricular opportunities that he seems interested in. While it may seem far in the future, extracurriculars and volunteer work will look impressive on a college application. Even if your child is too young for his extracurriculars to register on an application, it can create a life-long love for being involved and volunteering, which will serve him well on a future application.

Step 4

Explore options other than a traditional university scenario for your child. The U.S. Census Bureau estimates that of the 13 million post-secondary students, only six million attend traditional four year colleges or universities. Two-year schools, junior colleges, vocation and trade schools and other training may be a better fit for your child when the time comes to choose what to do with her life. Look at the various options and how to get your child into a career of her choice.

Step 5

Balance your education planning and saving with your retirement saving and planning, warns MSN Money. Get your kids involved in college savings by contributing some of their earnings to a savings account and make sure to continue contributing to 401(k) plans and various investment and savings accounts. With prudence, frugality and careful planning, you can both retire and help your kids' college plans come to fruition.