If you have or are thinking about having children, then you have probably given some thought to setting up a college fund. When you first look into it, the process can seem daunting. Savings accounts with funny names, varying state legislations and complex rules and regulations can overwhelm many parents. Fear not though, because the process isn't as complicated as it may first seem.
At its core, a college fund is simply an account which you set up with a financial institution with the express aim of saving enough money to pay for your children's education. The idea is that you make regular payments into the accounts so that by the time your son or daughter is ready to go to college, they will have a fund they can draw on to pay for their tuition fees.
A fund can be started at any time, with many couples deciding to start their fund before their children are even born. The sooner you start saving, the more money you will be able to raise. This is not only because you will have more time to make contributions, but because the power of compound interest means that starting just a couple of years sooner can make a huge difference twenty years down the track.
There are a range of different options open to you when it comes to deciding which account to use to start raising money for your child's college fund. It's worth taking some time to look into each of them, to see which one will achieve the best outcomes for you and your child. Some funds are tax exempt, some allow you to make withdrawals from the account if you need to, and some offer higher interest rates while others offer greater flexibility. Take your time and find the one which best suits your family's financial situation.