1. Save the money in advance, and/or
   
2. Get financial aid when the college years arrive.

"The common school is the greatest discovery     every made by man." Horace Mann

Saving is the Primary Source of Funding College
Setting aside a certain amount every month or each payday will help build up a fund for college. The earlier you and your child begin saving, the less you have to set aside each month.

Have a savings/investment plan. Think about where your child might attend college, the cost of that type of college, and how much you can afford to save. Keep in mind that colleges of the same type have a range of costs. Your child may choose to attend one that is less expensive. You can also pay part of the costs from your earnings while your child is attending school. In addition, your child could meet some college costs by working during the school year or during the summer. Finally, financial aid may be available, including loans to you and to your child.

What Savings or Investment Instrument will you Choose?
When you save or invest regularly, you gain two (2) ways:

1. Principal: The money you set aside accumulates.
   
2. ROI: The principal earns additional money as interest, dividends or appreciation. This is ROI (Return on Investment). The effect of compounding growth is the key to becoming financially independent.

The following charts show amounts you need to save or invest each month -- to accumulate $10,000 by the time a child begins college. The amount you need to save or invest varies substantially depending on the ROI (%) you earn (compounding growth) and the age of your child when you begin saving/investing. The higher the ROI and the earlier you begin your program, the less you need to set aside each month. Three scenarios follow:

1. Save $10,000 for College (4% ROI)
This is typical ROI for a bank saving account or Certificate of Deposit (CD). Saving for your future with these vehicles is much better than doing nothing. But be informed about the growth, it isn't much. The major benefit, virtually no risk.

Start	# yrs	$/Mth	$ Saved	$ Earned
Newborn	18	$32	$6,900	$3,100
Age 4	14	$48	$7,500	$2,500
Age 8	10	$68	$8,200	$1,800
Age 12	6	$124	$8,900	$1,100
Age 16	2	$401	$9,600	$400

 
2. Save $10,000 for college (8% ROI)
You will have to take a little more risk to get this kind of return. Investing in stocks is a possible vehicle. Or you may choose to commit some time to a side business.

Start	# yrs	$/Mth	$ Saved	$ Earned
Newborn	18	$21	$4,500	$5,500
Age 4	14	$33	$5,500	$4,500
Age 8	10	$55	$6,600	$3,400
Age 12	6	$109	$7,800	$2,200
Age 16	2	$386	$9,300	$700

 
3. Save $10,000 for college (12% ROI)
This is the typical return stock investors have enjoyed over a long-term period. Investing in stocks is risky and there is no guarantee that the future will bring these rewards. But from these charts, you get a good idea of what you can potentially expect from stock investing. At 12% ROI, start investing $13 monthly when your child or grandchild is born and you will have a $10,000 college fund when the child reaches 18 years old!