Start a college fund by first familiarizing yourself with all of the options available to you. In some areas, there are multiple types of college funds, but each one has benefits and drawbacks. It will benefit you to explore government options that may be available to help when saving for college, as well as private options before you decide to actually start a college fund. A personal banker or investment adviser may help guide you through this process.
Upon first deciding to start a college fund, use the Internet, your public library, local student financial aid centers and local education departments to help you discover all of the savings and investment options available to help fund a college education. As well, your bank should be able to recommend an investment adviser who can sit down with you and discuss private investment options that can be used to start a college trust fund for yourself or for a child. When exploring your options, be sure you understand all of the fees, tax benefits and consequences associated with each funding type.
When starting a newborn college fund or a children’s college fund for a child that is not yours, it may help to speak to the child’s parents or guardians to learn about other funds that may already be established. Even if starting a college fund for yourself or starting a personal college fund for your own child, it may help to speak to others who have opened similar funds in the past to learn how they went about doing so and to listen to any advice they may have to offer you. Gathering information from several formal and informal sources may help you start a college fund that is perfect for your needs.
After you have determined which type of fund you are most interested in, decide how much you are able to invest. You should also calculate how much you will need to invest or save over a period of time and create a budget for doing so in order to grow your fund to cover tuition costs. When calculating this expense, be sure to also budget for any fees as well as taxes that may be applied.
While the cost of the fund is important to you, you may also want to consider the costs associated with the fund in the future. For instance, some funds assess a fee to transfer the fund from your control to a student's control at the appropriate time. As well, there may be additional tax consequences to a student for a fund established in her or his name.
Once you have the amount needed to start a college fund and have budgeted accordingly, meet with the appropriate parties to actually open the fund. This may mean meeting with a personal banker or investment adviser or opening a unique type of savings account. Regardless of which type of fund you open, you will be asked to complete paperwork requiring your signature and identification when you start a college fund.