Baby Step 5

Baby step 5 is to set aside money in a college fund for your children.

Children grow up.  Hopefully they go to college.  Worrying about how to pay for college is a concern for all parents.  The earlier to you start saving money in a specific college fund and consistently add to it, the better off you and your kids will be.

College tuition generally inflates every year (just like everything else).  On average, inflation is about 7 to 8 percent a year.  It’s important to make sure that your investment will at least match or exceed that amount.

Dave says, “Regardless of how you save for college, do it.  Saving for college ensures that a legacy of debt is not passed down your family tree.  Sadly, most people graduating from college right now are deep in in debt before they start.  If you start early or save aggressively, your child will not be one of them.”