Financial Tools for Your Child's Education Savings - as part of the expert series by GeoBeats. Financial Tools for Your Child's Education Savings There are some financial tools available for saving for the child's education. A key one is a 529 Plan, and usually the state would have certain funds available, and mutual funds or investments available. And there are tax advantages, you may be able to deduct some of that from your state income tax as well as any of the money that grows and is used for education. You don't pay any federal or state tax on that, so there's tax advantages. Another key one is putting money into an IRA, and then some people use that mostly for retirement, but it's something where, when it comes time for the child's education, they can take money out of that IRA. They may pay taxes, but there's no penalty. And a third one is, that a lot of times by the time the kids are ready to go to college, the parents have boosted their income, and they can possibly have enough disposable income to possibly help with their education.