A college savings account
Even if you intend to have your children pay their own way, you never know what the future may hold, or how your views may evolve over time. It is best to put some money aside in savings now just in case. The 529 college savings plans, and Coverdell educational savings accounts are common ways to get tax benefits for your kid’s college fund. However, you must use the money for educational purposes or you’ll get hit with a tax penalty.
If you aren’t confident, you’ll actually be paying college expenses for your children, you may want to put money aside in an investment fund. Then, if they get a full-ride scholarship or burn out in the first semester, you’ll have a nice chunk of money for retirement.
