It’s back-to-school time, when millions of Americans turn their thoughts to lunchboxes, backpacks, textbooks and homework.

Here on Schwab Talk, we’ll be blogging all week about school’s impact on your finances. Join the discussion and direct your questions to family finance advocate Carrie Schwab-Pomerantz, who happens to be President of Charles Schwab Foundation, or financial planning expert Rande Spiegelman, Vice President of Financial Planning for Schwab Center for Financial Research.

Rande has already written a great three-part series about saving for college, posted in the Market Insight section of schwab.com. In fact, we liked his Market Insight articles so much, we asked Rande to update his saving-for-college timeline. Here it is, perfect for printing and tacking on your refrigerator door!

Saving-for-College Timeline
18 years before college	8 to 10 years before college	1 to 2 years before college
Open the account of your choice and contribute money every month, perhaps by signing up for an automatic investment plan.	If you haven't yet opened an account, do so right away. You may want to go with a 529 plan, which allows lump sum contributions and may give you a chance to make up for lost time.	Figure out your expected family contribution, a number that financial aid officers use to help evaluate your child's eligibility for financial aid. Look into your options for financial aid and scholarships.
If appropriate given your risk tolerance, invest the money in stocks or stock mutual funds for long-term growth. Contribute extra money whenever possible.	Contribute any windfall money to your college savings account.	Reassess the risk level in your accounts. As college approaches, consider moving the money into less risky investments, such as shorter-term bonds and money markets.
Source: Schwab Center for Financial Research

“Sending children to college can be very expensive,” notes Rande. “According to CollegeBoard.com, for the 2010-2011 school year, the cost of college including tuition, fees, books, room and board and other expenses averaged about $20,300 at an in-state public university and about $40,500 at a private school. Fortunately, the sooner you start saving and investing for college, the more flexibility you'll have and the fewer loan payments you or your child will likely owe.”

For more college-savings info, check out the College Savings Calculator on Schwab.com. And for more about financial aid, visit FinAid.org or CollegeBoard.org.

TALK TO US: How are you saving for your kids’ – or grandkids’ – college education? Use the commenting feature below to send your saving-for-college comments and questions to Rande Spiegelman. 

 

Investing involves risk, including possible loss of principal.

This information is general in nature and not intended as specific advice. Please consult your professional advisors regarding your particular circumstances.

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