Saving For Children’s College Tuition Fees: When Should Parents Start?

Everybody knows how expensive college tuition fees are. The big question for many parents is, "when should I start saving for my kid's college tuition?" A financial expert says that parents need to start saving for their children's college tuition fees right now and should not wait until tomorrow arrives.

"The more time the money has to grow, the more time the money has to grow," says New York Times financial columnist Ron Lieber in a report from Yahoo Parenting as originally posted in Fatherly. "The power of compound interest can work in your favor if you catch a couple of bull markets along the way, so the sooner the better."

According to Lieber, there are several steps in saving for children's college tuition fees. The first step is for parents to assess their retirement plan before worrying about their children's college tuition fee because this will open up more options in paying for the tuition and can help pay student loans in the future.

Lieber also recommends that parents get a-529-savings plan to obtain unparalleled tax deductions and have some of the parents' money invested professionally. These schemes are designed to encourage saving for college fees in the future, according to U.S. SEC.

The financial expert also recommended the ⅓⅓ ⅓ Rule. "The thought of this is to save a third [of how much you think your kid's college will cost], spend a third during the half decade your kid is in college, and then borrow a third with the borrowings being split in half between the student and the parents."

Another thing that parents always need to remember when saving for children's college tuition fees is that college savings plans are always evolving. Parents need to continue revisiting and reviewing savings plans because new strategies and products are always made available that might make saving much easier and more convenient, according to The Wall Street Journal.