Prepaid Tuition Plans
This is an excellent way of cutting costs and save money when your kid gets to college. However, it has a fair amount of expense related to it and can only be done if you have enough money. The idea is very simple. You can pay part or of the college tuition of your child today even if he or she has to go to college fifteen years from now. You can also pay the entire fee in advance. One you child gets to college, the amount you paid (in case of full) will be sufficient and the college fee will be charged as per the current rate and not that of fifteen years later. The programmes are often run by the state and only apply to county and local colleges in general.
529 College Savings Plan
This is another excellent way to save for college. You can start the savings from as low as $25 and keep on adding more money to the account as you want. The money is not taxed and can grow over time. It is also not taxed at the time of withdrawal provided that you use it for educational purposes. The contributions to the account can be quite sufficient depending on the state where you live.
This is a savings account in the name of the child that is operated by the parents or guardians. The child when an adult (between 18 and 21 depending on local laws) can then use the account. You can manage all the money matters in this account and can reinvest money as well. The earnings are tax free for the first $850 each year and the next $850 are taxed on the child's rate. The rest of the annual income will be taxed at the rate of an adult.