A standard, four-year college degree in the United States from a public university can cost more than $200,000 USD. Double that figure and you’ll have the cost of attending a private university. The first figure alone is enough to financially ruin many families across the country. However, it doesn’t have to spell out ruin for your family. Good financial planning and a small amount of money can go a long way in this case – especially if you start early.

Start Saving Early

The key is to start saving before your child even speaks his or her first words. The longer you can invest, the less money you will actually need to pay. You can start by investing as little as $50-150 per month. With at least eighteen years to grow the money, this way you won’t be forced to pay an arm and a leg all at once. Instead, the money will grow by gaining interest. You should be able to save a modest amount before your son or daughter is ready for post-secondary education.

Make Your Child Partially Responsible

Try to keep in mind that there are other sources of financial aid available to students, including loans, bursaries, deductions, scholarships, and education credits. Moreover, you should be forced to take 100% of the responsibility of paying for your son or daughter’s education. While he or she may not be able to save enough money ahead of time by working, there are other options, such as student loans. Paying for college is a ripe opportunity to teach your children about financial responsibility. They’ll be more likely to value their degree and take it seriously if they know exactly what it’s worth in dollars and cents.

Don’t Scrimp on Retirement Savings

If you think that paying for your child’s education should come before your retirement money, you are mistaken. While your children can easily find other sources to pay for college such as those listed above, you’ll have difficulty doing the same should you find yourself in a financial pinch when retired.

Naturally, you want to provide for your children, but you shouldn’t do so at the expense of your own retirement. If a college fund means jeopardizing your retirement income, it’s not worth it. Also bear in mind that financial need is determined based on a percentage of both your child’s assets and your own. However, your retirement savings aren’t usually counted as part of your assets. As a result, your child may be more likely to qualify for financial aid.

Good Investment Options

Given the price of tuition, stocks are currently the best way to invest your money over the long-term. Of course, stocks may become a precarious option as your child reaches college age. Losing money in a crash isn’t going to grant you a discount on tuition. Therefore, you should consider keeping a diversified portfolio, and selling some of your stocks when your child enters high school, just to play it safe. You can re-invest in bonds and cash, which offer less-risky returns.