As a parent, one thing that is always looming in the background is your child’s college education. Yes, you want the best for your child – to send them to a good school; to make sure they get a great education. But, all you hear about in the news is sky rocketing college prices. Not to mention you’re trying to save for your own retirement and everyday expenses. So how do you make it all work?
Start Small. Start Early.
Too often we look at which investments will give us the best return. But the most important aspect when saving is actually saving. The act of saving; putting money aside each month and not touching it, is what really matters.
Once you become accustomed to saving, the balance will grow on its own.
For example, when your child is born, if you put aside $150 each month until they are ready for college, the balance would be over $32,000 by the time they reach 18. And that doesn’t even include all the compound interest you’ll be earning over 18 years.
Now assume instead of starting early and saving just $150 per month, you wait until your child enters high school. You now have only four years to save for their college education. In order to reach the same $32,000 in the example above, you would have to save at least $8,000 per year! Not to mention all the interest you’d lose out on over those 18 years.
That is quite a daunting task; even more so if you have multiple children approaching college-age.
Gradually Increase Deposits
Just because you currently save $150 each month for your child’s college expenses, doesn’t mean you can’t increase that amount. As you advance in your career, get a promotion or bonus, slowly increase that monthly deposit. Before you know it, you’ll be up to $250, $350 or more each month. The main focus is that you need to START SMALL and START EARLY.
Outside Contributions
When it comes to saving money for your child’s college expenses, there is no rule that says others can’t help. In fact, this trend is quite common today – especially with family members.
Whether it’s your child’s birthday, holidays or other events, ask for donations to your child’s college fund instead of presents. Or, for example, ask grandparents to purchase just a small present for your child and primarily contribute to their college fund instead.
It is even common on birthday invitations to see a link where you can donate online to the child’s college fund.
Every penny saved counts!
Get the Right Help!
There are so many options when it comes to saving for college expenses. But which option is the right one for you? Does it make a difference if your child is still a toddler or if they are already in middle school?
That’s why we’re here. Not only do we have a full line of savings options available to you, but our staff is ready to help you make the right financial decisions. Working with you one-on-one, we’ll help find the plan and options that work for you and your specific needs.
Stop by or give us a call at 800.782.4899.
Each individual’s financial situation is unique and readers are encouraged to contact the Credit Union when seeking financial advice on the products and services discussed. This article is for educational purposes only; the authors assume no legal responsibility for the completeness or accuracy of the contents.