I want to save about $100 every month for my nephew so that when he grows up and reaches college education, he won't experience any financial crunch. Is there a way out where I don't need to add thousands every month given that my income is meagre and have two kids as well. Please advice, my nephew is 6 years old and I need to start saving soon. Thanks in advance.

Separate bank account?

Your question is a little vague.

I do this for my nephew/godson, who's a year old next month.

$100 a month goes into one of my ING accounts.

By the time he'll need it, even at the shitty 4.5% ING is currently paying here in Australia, it'll be a decent amount of cash.

Don't see why you need to add $1000's each month.

Also, as your Location field hasn't been filled in (hint - fix that), it's hard to recommend something specific for you to do. There are systems in the US that allow for savings for educational costs.

No on in the U.S. would consider that a shitty rate . ING is paying 0.75% here

I know, but we're also paying ~6% on mortgages.

I did just get a letter from my bank saying our variable rate had dropped down to 5.98%

If you are in the US, I would recommend 529 plans. My wife and I put away money for 6 and 9 yrs olds. You will be surprised what $100/month can do.

More info @ http://www.savingforcollege.com/intro_t ... 9-plan.php

Forgot to mention that if you are looking for a tool to help you plan for college savings, try http://www.finacast.com. It helps you plan save for college and tracks your money in 529 accounts if you choose to do so.

Yes, in the United States, a 529 plan is a great option. Here's a link to the SEC's basics on 529s: http://www.sec.gov/rss/your_money/529plan1.htm. Although authorized by federal law, the plans are actually sponsored by the states, so the different states have varying levels of quality for the plans they offer. I think spam filters only let me include one link per post, so I'll provide another one about the various states in a separate post. Note, I personally do not have experience using a 529 since I don't have kids/nieces/nephews yet.

Okay, here's the information about 529s in the states. It's from Clark Howard, a very well known consumer advocate based out of Atlanta. http://www.clarkhoward.com/news/clark-h ... uide/nFZS/

Watch out! Finacast is trying to sell you financial planning services you probably do not need.

529 101, money can only be used for education. can usually change "beneficiary" at anytime, to yourself included. I suggest Utah if you get no state income tax benefit. Can contribute to any state and use the money for any school.

Other options is gov't bonds, or if the child has the proper income, you can contribute to a Roth IRA for them. Which isn't for education, but it gets the money in there just in case and contributions made directly to a Roth IRA can be taken tax and penalty free. My children have/will have all of the above flavors.