Even in a good economy, many parents feel overwhelmed by the thought of saving for their child’s college education.

 “Saving for college doesn’t have to be complicated,” says Nicole Lowe, a financial center manager at Fifth Third Bank. “The key is to simplify this task so parents can tackle it confidently, beginning when their children are very young.”

Talk to a professional
Lowe encourages parents to view saving for college as a series of small steps. “The first step is to talk with your banker or financial professional,” Lowe continues. “All families are different, and we want to help them develop a plan that meets their objectives and budget.”

Although it’s difficult to predict the future, Lowe encourages parents to consider whether their children will attend a two- or four-year college, whether it will be public or private and whether students will live at home or need room and board.

Costs for these institutions vary substantially. For example, according to CollegeBoard.com, the average tuition at 2008-09 rates is:

• $25,143 per year at a four-year private college
• $6,585 per year at a four-year public college
• $2,402 per year at two-year public college

“Based on your child’s age and school preference, your banker can help you devise a plan that works with your income and budget,” Lowe says. “By saving as little as $25 every two weeks, you can accumulate nearly $11,000 in 18 years – and that’s not counting any possible earned interest.”

Lowe encourages parents to begin saving as early as possible. “By starting earlier, you can save a smaller amount each month. This also gives your savings more time to earn interest,” she explains. As a rule of thumb, she recommends saving about half of the anticipated costs, and managing the remainder with current income, scholarships, grants and loans. Students can also help out with part-time jobs.

Start with a savings account
When saving for college, Lowe recommends using a simple savings account. “They’re easy to open and very low-risk,” she says. “With some, you can also have money automatically withdrawn from another savings or checking account and deposited into the college fund on a regular basis.”

Nearly one in five families does not begin a college savings fund until their child is age 16 or older.

“Once you accumulate a small nest egg, you may choose to transfer your savings into an account that has the potential to earn more interest,” Lowe explains. “Your banker or financial planner can give you more details.”

Other benefits
College savings plans are also great motivators. “When children know money has been set aside, they are much more likely to pursue a college education – and graduate,” Lowe says. Over time, this fund ends up paying for itself. People who have a college degree earn, on average, about $1 million more over their lifetime than those with only a high school diploma, according to savingforcollege.com.

To learn more about saving for college, contact Fifth Third at (866) 475-4201 or visit 53.com.