The College Fund Baby Shower
Baby showers tend to focus on the immediate needs of mother and child. But someday, that baby's likely to need a college fund!
You don't often hear the terms "baby shower" and "college fund" used together, but you probably should. Even today, it costs about $10,000 a year just to attend an in-state public college or university. Who knows how much it'll cost 18 years from now, much less whether or not financial aid will be available?
So while flower bouquets of cleverly folded baby clothes are très cool and diaper cakes are fun, why not throw the mom-to-be a shower in which you contribute to the tyke's future education?
Traditionally, the purpose of a baby shower is to provide the mother with items she needs to welcome Baby into the world, and help her care for the child in the hectic first few months after his or her birth. In fact, some folks feel that should be the only purpose of a baby shower.
That being the case, you might want to carefully check with the mom about how she would feel about such a non-traditional event before launching one. Some expectant mothers might be upset if you don't meet their expectations, or may feel insulted if you present them with monetary gifts, no matter what the intent.
On the other hand, some will welcome the idea. You just need to be sure which side of the issue your friend comes down on.
An Excellent Investment
There are several ways you can provide mom and baby with seed money for a college fund. The guests can always give her cash or checks, either individually or collectively, that she could put aside for the baby's future.
On the other hand, she might also decide to spend the money on the things she needs for the baby right now. You can leave that up to her.
Another way is to give the child government savings bonds in his or her name. You can typically buy such a bond for half its face value, so a $100 bond would cost you only $50. These bonds take 10 years to build to full value, and by the time the child reaches 18, may have achieved significantly more value.
The 529 Option
Another great possibility is for you and your friends to set up a 529 educational savings account for the kiddo. You should get the parents involved here, because they'll need to manage the account (and ideally add to it) in the future.
If you go this route, we recommend that you go with the lowest-cost plan you can find, which is typically a state plan financed by Vanguard or TIAA-CREF. That way, management expenses remain low and you don't pay the high commissions that can eat away at the baby's incipient college fund.