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5 Financial Tips for New Families

Think "College," But Only If ...

One of the biggest concerns for new parents is one that's decidedly long-term: college. It's smart to start thinking about it early, since the costs of higher education are only going up, and even people who start saving in their child's infancy may find themselves looking for loans, grants and scholarships to help out.

There are countless routes to building up a good chunk of the expenditure without too much pain, including investments, bonds and savings plans (like 529s) designed specifically for tuition. It's this latter option that many experts recommend for the new parents, since they tend to be tax-free and easy to set up.

In these college-savings plans, flexibility varies, so be sure to find out what you can and can't spend the savings on and what happens if you need to take the money out early for a different expense. Then, set up an automatic, monthly withdrawal of whatever you can afford, and pay into the account for the next 17 years or so, building this expense into your overall budget.

You'll probably find this to be one of the smartest long-term goals to invest in, but there's another one that you might need to prioritize over it: retirement. Tempting as it is to save for your child instead of yourself, money experts warn against putting money aside for tuition at the expense of retirement savings. Retirement loans are hard to come by.

As a general rule of thumb, don't start putting money away for college until you're putting the safe minimum -- 10 percent of your income -- toward your post-work security [source: Ameriprise].

Next, there's more to save for ...