Start college planning early

Building up enough money to pay for your child’s education will take time, and that shouldn’t start the second they start going to school. Consider opening a savings account for your children the year they are born to get a head start on college savings. Doing so will help avoid a situation 17 or 18 years later when you ask: “What do we do now?”

Here are some things to keep in mind when looking for the right option.

Look at your options

There are two primary education savings accounts: Coverdell ESAs and a 529 plan. Both accounts provide for the qualified education expenses of a designated beneficiary. They differ in that the Coverdell ESAs can be applied to qualified education expenses whereas a 529 can only be applied to what are legally known as “Qualified Tuition Plans” by the federal government.

Consider all your children – present and future

If you have two children, maybe one education savings account will be fine but any more children than that and you risk not equally distributing funds into each child’s future education savings account. That being said, if equally distributing funds to your multiple children is something you wish to do, multiple accounts might be the best option to make sure that happens.

Stick to the plan – and adjust accordingly

Don’t become the parent that takes their children’s college fund and uses it to pay back debt or purchase a boat. Set up the education savings account so you can’t touch those funds unless it’s for an education expense. You can contribute more to it now and less later, but it is best to contribute as much as possible in the beginning rather than playing catch up later.

Travis Credit Union offers Coverdell Education Savings accounts for individuals looking to help their children pay for their education in the future. Find out how you can take the first step by visiting our website.

529 Plan Coverdell ESAs Qualified Tuition Plans College Savings Details