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Financial Answer Center

Age-Appropriate Strategies

Newborn to Age 10

Your goal should be to put away as much as you can each month as soon as your child is born. If you didn't start right away, it is still early enough to start saving for college with a long-term investment perspective. However, make sure you are funding your tax-advantaged retirement plans first.

  1. This is a great time to start a monthly college investment program. See the sections on The Cost to get an idea of how much college will cost. Also complete the Inflation Worksheet to calculate the impact of inflation on college costs.
  2. If you have already been investing, make sure that the amount you are investing will help you reach your goal. Consider increasing the amount you are investing each month, and consider diversifying your college investments. See the section Pre-Funding the Cost.
  3. Select the appropriate investment vehicle. Consider investing in growth oriented investments. See the sections Developing a Funding Strategy and Investment Vehicles for more information.
  4. Decide who the owner of the account should be. If you want to maintain control over the funds, do not open the account in your child's name. If your objective is to save taxes and you are comfortable giving up control of the funds when your child is no longer a minor, then consider opening an UGMA account or an UTMA account. See the section Saving Taxes for more details.

IMPORTANT NOTE: If you think that ultimately you will be applying for financial aid, it is best to invest the money in an account in your name. See the section Landing Financial Aid to help you decide how much you should invest.

  1. There are several tax-advantaged ways to save for college. See the section Saving Taxes to determine which investment may be right for you.
  2. Open a college investment account and begin investing on a monthly basis. See your bank or credit union's investment representative, who can help set up the right type of account.
  3. See the "Putting It All Together" worksheet to help you determine where the money is going to come from to pay for each year of school. The most important issue at this stage is to get started on a monthly investment program that takes advantage of the long-term time horizon you have to benefit from a growth-oriented investment program.
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Securities and insurance products are offered through Osaic Institutions, INC., Member FINRA/SIPC. Osaic Institutions, INC. and FB Wealth Management, a division of First Bank, are not affiliated. We do not provide tax advice. Consult your tax advisor. NOT Bank Deposits NOT FDIC-Insured HAVE NO Bank Guarantee NOT Insured by any Federal Government Agency May Go Down in Value