When to start saving for your child's education?

This is one thing that I've been nervous about since we started thinking about having kids. So far, we're putting $2000 annually into a 529 plan for our daughter, but I know this isn't nearly enough. I always wanted to fully pay for our child's education like my folks did for me, but I don't know if that is realistic anymore.

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There are also programs with some (usually state) universities where you can lock in their current rates buy buying credits/classes now. Obviously this limits the choice of colleges, but it is helpful for families who already know that their choices schools/tuition ranges would be limited due to finances. Or for families who are certain their kid is going to be a Gator/Hoosier/Hoya, etc. etc. ;o)

Don't forget UPromise! I have a couple friends that have been doing that since they got married (pre-kids), and there are tons of retailers that participate. It won't add up to the whole cost, but if you're shopping anyway... :)

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We started saving for my son's college education right away. Our financial adviser showed us how much a typical state university education could cost in 20 years with inflation. Shocking.

Another resource to check out is uPromise. You sign up, enter your credit card and grocery card. Then, whenever you make normal purchases, the products you buy earn you money towards college. It's ten cents here, fifteen cents there, but after a year we've got $100 in the account.

http://upromise.com

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We signed us and our parents up for UPromise credit card, so we get about $800 a year from that - just from using your credit card as you normally do. Plus, we put away about $3000 annually.

Most importantly, we try to raise a genius, so that he can get a full scholarship ;)

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I started saving for my daughters education the week I found out I was pregnant, by going to my employer and signing up for us savinds bonds, I aslo started a 529 when we got her ssn - and always request a contrubution from grandparents rather than large stashes of toys on holidays.i did not finish college for financial reasons and it is my major goal as a parent that my child never have to chose the way I did, working two and three jobs to pay tution isn't gonna happen.

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We are phenomenally lucky to have grandparents with money that they wish to share with their grandchildren. My son has a "Bright Start" account (a 529 plan) that they add to every year, so his college education is already paid for. Even if we didn't have this generosity bestowed upon us, we would have started a plan for him from day one. I look at it the same way that I look at retirement accounts - they are an absolute necessity, and you should pay them before you pay anything else. Have a portion of your paycheck diverted into the account each month, if possible, just like you do with your 401K.

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Kristen , we just found out from our money guy that if we do open an RESP for our kids, the federal government will match a percentage of our payments up to $2000 a year. (I'm pretty sure you're in Canada like me, right?) It's not very well advertised by the government, but when we heard about it, we opened up an RESP right away.

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UPromise is good, but I would highly recommend starting a 529 College Savings Plan. Every state has one. Your deposits into the account are not deductible on your federal tax return, you pay no taxes on the account's earnings, and when you take the money out to pay for college, it comes out federally tax-free. Our plan also covers all "qualified higher education expenses," including: tuition, housing, books, fees, etc.

Another benefit is that your child doesn't have control of or access to the account -- you do. So there's no threat of them withdrawing the whole thing and going to Vegas...

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I have the money since I didn't start my family until about 15 years into my post-grad school career. Basically, I led an extremely frugal lifestyle for seven years because my student loan payments were almost as large as my salary less rent. Once I paid them off, I had gotten used to frugality, so I kept it up in order to pay off my house and car, help my family, and put the maximum allowed amounts in my pre-tax and after-tax 401-K. At this point my 401-K and my pension should be sufficient to cover any reasonable educational aspirations my kids may have, assuming nothing catastrophic happens between now and then.

However, I don't plan to tell the kids that. I plan to tell them I'll pay for four years of state university tuition, and they should plan to provide for the rest. I think it's best to encourage them to work hard for college money and scholarships. This way they will develop good study and work habits and frugal spending habits, so they can eventually live comfortably on their salaries and save for their own kids' education, instead of always scrambling to pay last year's obligations.

It would be great if I could use my savings for family things that are both enriching and fun, like international travel. However, I do feel good knowing I will be able to help with the kids' education if need be.

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We started saving right away with maximum contubutions to a Roth IRA for this purpose. My parents also contribute to a 529 for her. However, I am more aggressive about saving for my own retirement. There are loans/grants/scholarships for college, but none for retirement.
I paid for my own state college education (and paid off the loans for 10 years after graduation) and while we will assist our babe with tuition, we will not be able to pay all of it.

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From a financial perspective, the earlier you start saving and the more you start with, the more money you'll have at the end.

My little one's almost 2 yrs and I plan to open an RESP shortly... right after I get my tax return. ;)
Personally, I plan to contribute so I get the maximum matching amount from the Federal Gov't.

To add/correct Jenn's comment. The Fed. Gov't will match 20% of your contribution up to $500/yr. So if you contribute $2500/yr you'll get the $500. (Previously the gov't match was $400/yr hence the $2000). Almost any Cdn. Bank will help you setup an RESP and should be able to explain all the ins and outs as well as restrictions and limitations. The main benefit of an RESP is the growth is tax free.

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