It has been said time and again that a parent’s greatest legacy to his/her child is a good, solid education. It cannot be stolen, and will open a lot of opportunities for a person which will help him/her through life.

Recognizing the value if education, the US Congress had established the Coverdell ESA, or Education Savings Account, which are accounts whose earnings will be qualified for tax incentives, thus encouraging parents to save up for their children’s education. The Coverdell ESA allows for as much as US$2,000 at maximum for yearly contributions to the Coverdell ESA for each child. This is a very good opportunity for parents to save up for their children’s future higher education expenses.

Therefore, to get the most out of an educational IRA account (now known as Coverdell ESA), parents must start as early as possible to take advantage of the most of tax incentives being given by the US government. Starting early will work both ways – longer time for saving money and more tax incentives to come with the savings. If the money needed to save up will restrain normal cashflows, encourage friends and relatives to contribute to the fund; let them know that you’d rather get cash donations for the funds rather than toy gifts for birthdays and Christmas. Although, this might only work early on while the kids won’t be old enough to appreciate their toy gifts on Christmas Day.

If ever you find it difficult to build on the savings for your children’s Coverdell ESA, always remember that savings is an expense to buy the future – your kid’s future in this case. Keep in mind of the goal, of the opportunities you will be securing for your children while building your Coverdell ESA along the way. Sacrifices are realities of life, and a little trade-off, more extensive family and expense planning should all be worth it in the end.