Six inches today so far . . . and still snowing steadily. It’s going to be a fun drive to work in the morning.

Within a week of my opening an online account, the rate dropped from 4.10% to 3.65%. Thanks Federal Reserve. CD rates dropped to 2% for a 6-month CD, too. Well, maybe they’ll drop a little more and make it worthwhile to refinance the mortgage.

OK, for those of my friends (and family members) who have kids or are soon to have kids: here is the low-down on saving for college?or even high school or grade school?for those little ones. I know I promised at least one person I would talk at them about this, so . . . in a not-so-pushy way, here goes.

There are several ways to save, whether you have a little or a lot of money to throw at it.

Savings Bonds: Probably the easiest way to save money for higher education is by purchasing savings bonds that can be used tax-free for qualified education expenses, such as the Series EE and I bonds. You can buy up to $5,000 worth of bonds per individual per year. If you’re planning to use them for your kids for college, you want to list yourself as the primary with the child as the beneficiary. You can get bonds at your local bank or through the US Treasury’s website.

Coverdell Education Savings Accounts (previously known as the education IRA): you can contribute $2,000 per child per year to a Coverdell. The best part? You can use the funds for qualified education expenses for K-12, not just for college. So if you want your child to attend a private school, you can save money each year and, when you’re ready, use it for his or her school bill, or a computer that he or she will use for schooling, etc. The downside currently is that the K-12 provision and the $2,000 limit are set to expire in 2010 unless Congress renews them. I’m not worried about the renewal. For details on the CESA, see this link. It can be a little difficult to find banks that do Coverdells rather than the fallen-from-favor UTMA or UGMA (uniform transfers to minor act or uniform gift to minors act) savings accounts. Washington Mutual does them and you can choose whether to invest in a straight money market type savings account or whether to use their brokerage and invest in a stock portfolio. At $2,000 a year and for a fairly short time horizon, I would pick the savings account.

529s: The traditional state-by-state 529 plan allows you several options. Depending on the state plan you choose (and it doesn’t have to be the state in which you live or the state in which you think your child will attend college), you may “pre-pay” your tuition or you may invest with a company such as Fidelity or Vanguard in an assortment of stocks and bonds. The money is not taxed upon withdrawal as long as it’s used for qualified education expenses. You can name yourself as the owner of the account and have the child as beneficiary so that you have control of the account. If your child decides not to go to college, you can transfer the account to another child, or decide to use the money to go back to school yourself. Money from a 529 can’t be used for K-12. To compare state plans and to read much, much more about 529 plans, click here. Note that contribution limits on 529s are set higher than I could hope to make in several years, so I won’t depress myself by mentioning them.

I’m that boring aunt who never buys toys or fun stuff on the kids’ birthdays: I use Coverdells for some of the nephews, savings bonds for others, and a 529 for one.

Savings bonds are easy and are probably easiest if you’re not sure whether the child will want to attend college. They can be used for non-education expenses; you just have to pay taxes on them. Coverdells I like because they can be used for K-12 expenses. If you can use money from birthdays, cash gifts from baby showers, regular savings, whatever, to put money in a CESA each year, then let it build up until late grade school or academy, then you can ease your school bills later, and earn interest to throw onto the school bill, too. As for 529s, these are the usual or preferred college savings vehicles about which finance advisers talk. Obviously, I am not a financial adviser, but I think a hybrid approach of a Coverdell and 529 would be best. And if you don’t like asking people for cash, maybe asking them to buy a Savings bond for your child’s future education would be an easy alternative.

You can read more information about Coverdells and 529s at the following sites. Saving for College is generally popular but Bankrate and fool have good calculators and have much prettier websites.

http://www.savingforcollege.com/

http://www.bankrate.com/brm/rate/college_home.asp

http://www.fool.com/college/college.htm?source=PFinAg

Well, I’ve done it: I’ve been unfaithful to both of our financial institutions. I opened an online high-interest savings account in which to stash money. Don’t get me wrong, I enjoy earning interest on the checking account, but 1% interest is nothing compared to 4%, so I decided (and the budget subcommittee approved) the opening of an account specifically earmarked for my special savings project, namely my goal for 2008 to seriously increase our emergency fund and fund a future car purchase. It pains me a little to bypass dumping more-than-the-mortgage-payment payments of principal onto the mortgage, but I think this is a better goal.

in the mountains, that is. This morning, when we left for skiing, there were 22 new inches of snow. It was a wonderful day. I did a spectacular face plant into two feet of powder. (You need to go faster, the spouse said. I’m afraid I’ll fall, I said. I went faster. I fell.) It was all good in the end, even though I had snow that went down the back of my jacket. It melted and froze my neck. Hot chocolate fixes such things.

Sunday plans: more skiing. It is supposed to snow more tomorrow and Saturday, so I hope there will be more fresh powder for Sunday.