Saving for College

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How important is it for parents to start saving early to build up a college fund for their children?

Pretty important.

College tuitions have gone up about 8 percent per year for the past 25 years. Today, an education at even a low-cost public four-year college or university typically carries a price tag of $40,000 to $60,000, while private institutions can top $150,000 for four years. Compound that by 8 percent per year for the number of years before your child goes to college and you’ll have a rough idea of that future cost.

Fortunately, that same kind of compounding can work to your benefit. One key is to start early. Saving regularly and using the variety of savings vehicles available often means the difference between going to the college of your child’s choice or going to the one you can afford.