Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open.

Child is on the way, invest for college and car fund options - opinions
Look at your options with a 529 program. If the money is used for education expenses: that currently includes tuition, room & board (even if living off campus), books, transportation; it grows tax free. Earnings are not subject to federal tax and generally not subject to   state tax when used for the qualified education expenses of the   designated beneficiary, such as tuition, fees, books, as well as room   and board. Contributions to a 529 plan, however, are not deductible. If it is a 529 associated with your state you can also save on state taxes. You can make contributions on a regular basis, or ad hoc. Accounts can even be setup by other relatives. I have used a 529 to fund two kids education. It takes care of most of your education expenses.  529 programs are available from most states, and even some of the big mutual fund companies. Many have the option of shifting the risk level of the investments to be more conservative as the kids hit high school.  Some states have an option to have you pay  a large sum when the child is small to buy semesters of college. The deal is worth considering if you know they will be going to a state school, the deal is less good if they will go out of state or to a private college.  The IRS does limit the maximum amount that you can contribute in a year an amount that exceeds the 14,000 annual gift limit: If in 2014, you contributed more than $14,000 to a Qualified Tuition   Plan (QTP) on behalf of any one person, you may elect to treat up to   $70,000 of the contribution for that person as if you had made it   ratably over a 5-year period. The election allows you to apply the   annual exclusion to a portion of the contribution in each of the 5   years, beginning in 2014. You can make this election for as many   separate people as you made QTP contributions One option at the end is to take any extra money at graduation and give it to the child so that it can be used for graduate school, or if the taxes and penalties are paid it can be used for that first car. It can even be rolled over to another relative.