Hello,
We have a 7 month old baby girl and I'm wondering if we should start a college fund for her. We have a college fund for our 3 year old but obviously have lost a significant amount due to the economy so I'm a little torn on what to do for our second daughter. I have some money saved in an old growth and income account and am wondering the best place to put it. Would it be better in my Roth IRA, Money Market Savings or College Fund? Any thoughts?
Thanks moms!
we set up college funds for our kids too, 7yo, 5yo and now my 2 month old. depending on the type of investments you put in it is a great time. for us we use coverdell and picked some long term type investments. meaning that now that the market is down it only means that our money can afford much more shares of stock then when the market goes back up we can afford less, but each share that we already bought is worth more. i don't know if im explaining this correctly, but we have been doing well with these investments. you have to think long term, you want the market to go up and down. if you want some sound advice and better explanation you should talk to a financial advisor. i have a great one if you need a referal. just send me a message and i can give you the info. good luck
I think now is a great time to start a college fund. I would probably do a college fund b/c the money market savings accounts would be too conservative and not "grow" or earn enough money. And I'm not entirely, sure, but I really think the Roth IRAs are just for retirement so I don't think you could even use one of those to fund college and you might be penalized or taxed really heavily if you withdraw the money before retirement. But again, I'm not entirely sure...
My daughter is 13 months old and we opened a 529K plan just before her first birthday and received money from several relatives at her birthday party to put into her account. Your baby is only 7 months old, so even though there will be some losses, there will also be a lot of gains as well. Be sure to invest only what you can afford to lose so that the losses won't seem as great. The 529K plan is great because it automatically adjusts risk level based on how old the child is. The risk is higher when they are younger b/c there is more time for the money to grow if there is a set-back, and the portfolio becomes more conversative and less risky as the child gets older and is closer to the time that they will actually need the money for college. Let me know if you need a recommendation for a great certified financial planner.