Q. What should I invest college money in? Stocks? Bonds?
A. The longer the time period until you'll need the money, the more risk you can take. Here's a typical set of guidelines that some financial planners might offer you:
Birth to School Age: 100% growth stocks. You have more time, you can take more risk.
Age 6 to 13: 70% stocks, 30% bonds. You might want to think about making a few more "prudent" selections.
Age 14-18: 30% bonds, 20% stocks, and 50% money market funds. You want your money to continue to grow, but you also want to protect yourself from market volatility.
College Age: 100% money market funds. You want to be able to access the money easily and not have it drop in value. For funds earmarked to be spent a year or two down the road, certificates of deposit are a good idea.
There's a lot to know about how to save for and pay for college. Drop by our newly revised College Savings Center. Also of interest might be these additional resources: the U.S. Department of Education, the Student Guide, www.finaid.org, the College Board, Peterson's, Campus Tours, The 529 plan guide, and Mapping Your Future.
If you wish you had a financial pro to talk to, to address your specific personal situation and help ensure that you're saving enough and well enough to meet all your needs, then read more about TMF Money Advisor. It's a valuable service we're offering, featuring customized independent advice from a variety of objective financial pros.
If you have any questions, thoughts or opinions on this topic, share them with others on our discussion board for Ask the Fool.
This question and answer is adapted from The Motley Fool Money Guide: Answers to Your Questions About Saving, Spending and Investing. For answers to this and 499 other common money questions, check it out -- it's a handy resource.
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