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A Final Word

By Harold Simansky
Educational Investment Advisor

As we emphasized at the start of these articles, a college education is the greatest investment you can make – but it is undeniably pricey and this situation is not going to improve as your child grows up. What better argument for getting started on a savings plan as soon as possible?

In our discussion of the many decisions parents like you face in saving for college, we have covered the advantages and disadvantages of a variety of savings programs and showed you some ways to maximize financial assistance and your investments. We could not, of course, touch on all of the savings programs available out there, and two additional options may be worth considering. One is U.S. Savings Bonds, which under certain circumstances are tax-free if used for education. The other is Individual Retirement Accounts, which may be used penalty-free for education.

Saving for college involves making many choices, and making them wisely. We hope these articles have provided you with a useful roadmap as you get that important savings program underway. Here, again, are the basics for managing and achieving your family’s educational goals.

  1. Understand how much school will cost, how much financial aid you will receive, and how much you need to save.

  2. Identify the savings vehicle that best fits your needs.

    • Start by understanding the difference between a taxable and a tax-advantaged vehicle. If you choose a tax-advantaged vehicle, be sure you are willing to pay a penalty if you do not use the money for education.
    • Whether you choose a taxable or a tax-advantaged vehicle, understand your different options (as detailed in Article Five - "Which Plan is Best for You?") and see which one best suits your situation.

  3. Find a provider for the investment vehicle you have chosen.

    • If you are considering a 529 Savings Plan, investigate your own state’s plan. There may be state tax advantages. That said, in many state’s there is no advantage in choosing the state-sponsored plan, so you are better off in a lost cost plan like the Iowa or Minnesota 529 plans.
    • Keep costs low. Avoid paying any sort of commission or "load." Look for mutual funds with low expense ratios
    • Don’t focus on performance. Performance varies from year to year. You will have better luck with a low-cost index fund.

  4. Invest the money properly.

    • Identify a mix of stocks and bonds that is right for you, based on how old your child is and how many years of investing you anticipate. (See Article Nine - "Investing Your Money" for recommended asset allocations.)

  5. Know your limitations.

    • Be prepared to hire a financial advisor if you don’t feel confident investing, or if you need further assistance

The most important thing is to get started as soon as possible so... Start Saving!

Article #9 -
Investing Your Money

About the Author

Harold Simansky is the founder of Educational Investments, LLC, ( a Registered Investment Advisory firm focused on helping families save for education. His book, College Costs How Much?! The Workbook to Help You Save for School, which explains the financial aid process, is available at You can send him an e-mail at

Related Resources

These tools can help you better understand the cost of college, the implications of saving, and the long-term ramifications of financial aid packages: