Index

1. Costs of a College Education 2. College...is it worth the price? Steps to take when saving for college 3. Make yourself a plan 4. Getting started early 5. Help for the late starters 6. Educational IRA and Investing Strategies

Ahh...I see that you have decided to start saving for college early. Good job! By starting early, you're giving yourself more time to save and prepare for a higher education.

With a nice amount of time until college, you have more time than most people to prepare for this financial hurdle. But this does not mean that you should think that you could put saving off for a few years.

Now that you have decided to start early, then here are a few steps that you should consider taking:

• Find out what the cost of college will be- By now, you probably have an idea of what the costs of college are today. But what will the costs be in 7 years? 9 years? 13 years? 18 years? The cost of college goes up each year. To get a good idea of what college may cost by the time you or your child enters college, we recommend that you visit www.schwab.com and use their planning calculators.

• Decide on how much you should save each month- Saving a set amount each month is a good way to begin good investing habits and it generally provides an easier way to save a large amount of money by allowing you to do it over time.

Now that you have an idea of what college costs, you can figure out how much you will need to save each month to reach that goal. Here is an excample of how to do this:

Let's say that Junior is 4 years old and he will be entering college in 14 years. By then, the cost of a college education will be around $90,000. To reach that goal, you would need to invest $500 for the initial investment and then $250 per month at a 10% annual return. The amount you would need to invest each month varies on the return you would receive but the stock market has returned an average of 13% over the last 30 years so 10% would be a somewhat modest figure.

You can decide on how much you should save each month by visiting www.schwab.com and using their planning calculators for college.

Start investing- Okay, so you decided to begin investing early. Good decision. Now you need to take advantage of that. It's time to get started. There are many different investments out there that you can put your money or your child's money into to help prepare for college. You can learn more about these investments from the various sections of this website.

Don't break the habit- Once you begin investing regularly, don't begin to withhold investments. It is important to keep investing a little each month if you want the money to grow. Also, once you begin to hold back investments it may be hard for you to break the bad habit and get into the act of investing regularly again. Often times a person stops investing regularly and never goes back. If this is the case, you will be faced with a big burden of debt when you or your child decides to go to college.

Relax- Ok, you have done yourself a great favor by starting early. Now you can relax and enjoy life while your money grows.

Next: Help for Late Starters