Double the Children, Double the College Tuition: How Parents Can Start Saving Now

By Maria Rainier

As if raising a newborn wasn’t already as expensive as it is, raising twins can really take a strain on your finances. After all, you have to purchase double the amount of diapers, clothes, toys and, eventually, double the college tuition. We know what you’re thinking: Isn’t it a bit early to think about college? Not really. Experts suggest saving as early as birth to help secure your children’s future. While keeping your fingers crossed that at least one of your children will score a scholarship or grant, it’s better to start preparing now in case this does not happen. That said, to learn a few ways you can start saving for your twins’ college education, continue reading below.

529 Plan

The most popular choice with most parents is a 529 plan, which is a state- or educational institution-operated savings plan. There are two different options: savings or prepaid. A savings plan works very similar to an IRA. It grows tax-free and allows you to choose from several investment options — whichever stocks and bonds you choose to invest in will determine the total amount of money the beneficiary (your child) will receive once he or she reaches a certain age. The prepaid option allows parents to pre-pay all or partial parts of their child’s college education. It’s important to remember that the price of tuition varies over time, so pre-paying might not be the best choice. It’s good to know there are also some tax breaks available in most states when getting a 529 Plan.

Coverdell Education Savings Account

Another popular savings choice is obtaining a Coverdell Education Savings Account. It’s very similar to a 529 plan in terms of the fact that it can grow tax-free, but this saving plan has restrictions — you cannot put more than $2,000 in the account each year, and your child must also use the money before he or she turns 30 years old.

Gerber Life College Plan

Technically, this is an endowment life insurance policy to help your children survive financially if you experience a premature death; however, the Gerber Life College Plan is also backed as a college savings fund. Once your account reaches its maturity date and you’re still alive and kicking, that money can be used for your child’s education. There is no investing. You choose the amount of money you want to contribute each month (which eventually becomes your fixed premium). However, there is a guarantee that your benefit payout will be larger than what you contributed.

Upromise

Last but not least is Upromise, offered by loan lender Sallie Mae. This is a different approach at savings since it allows you to save for your child’s education every time you make purchases. Upromise is partnered with more than 8,000 chain restaurants and thousands of other retail stores. Every time you make a purchase at these locations, 25 percent of your purchase goes into your child’s college fund.

Maria Rainier is an avid education blogger, particularly in the area of online learning and higher education. She’ll gladly dole out her wisdom to anyone who will read her advice, from prospective students considering online degrees to course instructors frustrated with the efficacy of their lesson plans.