If you’re a parent, there is a lot of pressure out there to prepare for your child’s future. Many of us start thinking about college savings accounts the day our child is born. But for many of us, the compulsion to save up for college is coming at the expense of our own financial picture. To that regard, it’s time to take a step back and remember the rules of college savings for your kids.

Skip the Traditional Savings Account

Your traditional bank savings account doesn’t make you very much in terms of interest, especially in today’s financial environment. Fortunately, your child isn’t heading off to college tomorrow (or at least we hope not!) and you have some time to prepare for the future. There are many different plans available that will help save up specifically for college funds.

A Coverdell account allows you to select your investments, much like a mutual fund might, and that means that a young savings account with more than a decade to mature can be invested more aggressively than an account that will be used in just a few years. Of course, you’ll have to make the adjustments and elections as circumstances change, and you’ll be exposed to a higher risk of potential losses, but there is a significant opportunity for growth when using this sort of account.

If you’re more concerned about safety for your investments, your savings account still can’t compare to a Section 529 savings plan. The 529 is a prepaid tuition plan for a specific state, or in some cases, across state lines. If you save in a 529, you’ll also have possible incentives by the state where you hold your account like reduced tuition at state universities or matching contributions in some areas.

It’s always worth investigating the possibilities for your state to see if you can take advantage of the “free” money by starting one of these plans. Expect to have fewer options about where to save your money, however, but you can still expect a better return on your savings than if you stick your money in a pillow case or traditional savings account at least.

The “College Experience” Isn’t Mandatory

We often assume that we must send children off at eighteen to experience a full four years of college. This isn’t exactly the case and it doesn’t necessarily have to happen immediately after high school. Talk to your child about your financial situation and his plans. There is a lot to be said for spending the first semester or two in a local community college where you can skip paying for room and board, skip paying high tuition costs and possibly increase your child’s chances of getting into his first school of choice.

It’s important for both students and parents to realize that community college classes are much, much less expensive and they will give you the basic credits you need to get started on just about any degree. If you score highly on those credits, you can then transfer into a four-year school of your choice – just be sure to check ahead of time that the college credits transfer smoothly.

A side benefit of this plan is that there are a large number of freshman in most colleges who don’t continue their studies after the first year of two. Those hotly contested spots in a university’s freshman class are suddenly open and available for experienced students as transfer possibilities. This is especially meaningful for students who missed out on getting acceptance to a favorite university their senior year of high school.

For the parent, you’ll be saving money that first year or two, giving you more time to save up for university costs. In addition, your child will have more time to select the right university, make up his mind about a field to study and have time to mature so that the university expenses don’t drag on any longer than absolutely necessary.

College Savings Isn’t Mandatory

We all want our children to be set up nicely for college and we also want our children to do well in the world – supported by that college education and very little debt. But the reality is, we often put our children’s college savings ahead of our own savings. If you don’t have a flush retirement account or a hefty savings account for emergencies and unemployment type scenarios, you’re playing a very dangerous game by saving up all your funds for college.

There are many scholarships, grants and loans available for college. In addition, your student can work part-time during his college years to help cut some of the costs. There are no scholarships for retirement savings and nobody is going to give you a retirement grant.

Put your own retirement needs first – as much as it pains you to do it – and then focus on college savings. Your child will have plenty of time to earn his way out of some college debt. You can’t say the same about your empty 401K when retirement is just around the corner.

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