Stale Green Light

Though some parents are against saving money for their kids to use as adults for thing like college, many parents are avid about putting away a few dollars every month.  The college fund is a smart choice, especially for parents who want to make sure their kids can go to college.

Though there is always talk about scholarships being everywhere, the truth is, they are pretty hard to come by unless you are extremely athletic, a genius, or are blessed with having a minority bloodline.  If your kid is an average, Caucasian, without any super-talents, they may have trouble finding a scholarship.

Oftentimes, kids who want to go to college simply cannot afford it, and it breaks many parents’ hearts to see their kid not get an education.  If you want to avoid experiencing the devastation of not seeing your child go to college and continue their education so they can be a doctor-start a college fund, and start it early.

The smartest choice is to start the fund when you find out you are pregnant.  Though doctor bills may seem expensive at this time, it is probably the most money you will have in a long time, so start saving while you have money to save.

Once the child is born, the expenses of clothes, diapers, food, and everything else will only add up and leave you with less and less cash to spare.  Start a college fund early and commit to putting a certain amount in it every month.

This will gain interest and hopefully be enough to pay for the undergraduate.  If you have some leftovers when your kid is all grown up and graduated, take that money (which is still gaining compounding interest) a buy a car or go on vacation.

After all those years of raising a supporting your child, you deserve a treat!

When you make money, the easy thing to do is to spend it right away.  Though it is fun to buy new stuff, it is probably in your best interest to save that money.

By putting your income into interest bearing accounts, you can be making money without lifting a finger.  You probably won’t make more than a few dollars  month, but that adds up over time.

If you plan on not touching the cash for a while, consider putting it into a CD.  This earns you even more in interest but its best feature can also be a drawback.

With CD’s you cannot withdraw any money until the time expires.  This is because the bank is loaning out your money to other people, which is why they pay you more to put it in their bank.

This is a plus becuase it takes away the opportunity for you to spend that money, but if an emergency happens you can’t access the funds.

The contracts range anywhere from a couple months to several years, so you have several options.  You could get out of your contract early, but it comes with a hefty fee.

You can also invest in an IRA to save up for your retirement.  These are also interest bearing accounts that earn you money, and you can add as much as you want to it as well.

You can withdraw from these accounts, but it is not advised since your monthly interest installment will decrease.  IRA’s are great ways to save for your retirement and still have some freedom with your funds.

The mistake of many young people fresh into the workplace after college is that they don’t start their retirement.  When you set up a retirement fund, it grows by compounding interest.

That means the longer the money is in the bank, the more of it there will be every year.  If you start your retirement when you’re 40 or even 35, you are at a great disadvantage.

Start a retirement fund the day you get your first steady job.  That means you’re going to have to do a lot of research beforehand because that paperwork is given to you to sign on your first day while you’re telling the company how to pay you.

The way it works is your company’s accounting department will take out a certain amount of money (specified by you) each paycheck and deposit it into a retirement fund.  You should put in as much as you can afford while still being able to pay your bills and have a bit of extra cash to put into your savings account or other investments like stocks, real estate, cars.

If you start your retirement fund early, you will be able to retire earlier with more money, or work for longer and get even more money upon retirement.  It may not seem relevant or important at the age of 20, but if you don’t start depositing money now, you could end up with hundreds of thousands of dollars less when you’re 50.