Preparing for a child or grandchild's education isn't as simple as it used to be. Today's options offer more potential, but must be chosen carefully. Depending on family income and other factors, it's important to make these decisions as early in the child's life as possible.
Once you know that you are ready to start, you must decide how.

Your individual goals, attitude toward risk and your investment time horizon for achieving your goals will help determine the types of investments that are suitable for you.

Some options may include:

• Coverdell Educating Savings Accounts
  
• Custodial Accounts
  
• Cash Value Life Insurance
  
• Section 529 Plans
  
• Mutual Funds
  
• Money Market Funds
  
• Equity Investments
  
• Fixed Income Investments
  
• Annuities
  

As with any major financial goal, the earlier you begin saving and investing, the better off you will likely be. For many people, saving early for a child's education was just not possible. If you fit in that category, you don't need to resign your hopes of seeing your child in a cap and gown. Multiple options are available for latecomers and many require that your student get involved.

There are a variety of different types of loan and grant programs you can apply for which may include:

• Federal Aid
  
• Pell Grants
  
• State Grant Programs
  
• Institutional Aids
  
• Stafford Loans
  
• Parent Loans
  
• Nonfederal loans
  
• Grants
  
• Scholarships
  

Help your child find opportunities, qualify them and provide the financial information required on the applications.

To help pay for higher education costs, the federal government offers parents and students tuition tax credit programs: Hope and Lifetime Learning.
For the most up-to-date information on rules and restrictions, visit the Web sites of the Department of Education and the IRS or speak with your legal or tax advisor.

Beyond preparing for education
Preparing for your financial independence needs encompasses more than saving for your children’s education. To be certain that the funding for your children’s education will be available when it is needed, you should also consider other potential life events that could affect your goals – events such as:

• The unexpected death of you or your spouse
  
• A disability or illness that could prevent you or your spouse from working
  
• Your own retirement
  

With adequate life insurance, disability income insurance, and other financial products, you can protect yourself from having to tap into your savings to cover other expenses