In the early days of parenting, you are so focused on the here and now that thinking ahead to the next month is nigh-on impossible – so thinking about events 18 years in the future is usually the last thing on most new parents’ minds. However, as time passes, parents begin to think about events that far ahead and, in particular, the cost of sending their child to college. Chris and I personally have talked about this from day 1. I know it is at the forefront of my husband’s mind more often than mine as I am just trying to push through a day with everyone fed and safe! However, now that George started Pre-K 4 this year, I know it is time to start saving.
College is, without a doubt, expensive. There are various reasons for this, which are discussed in-depth at TheAtlantic.com, but the incredible expense is a fixed fact that all future students will have to contend with if they wish to obtain a degree. There are, of course, various mechanisms available to ensure those who wish to go to college are able to – from grants to scholarships to student loans – but parents often choose to supplement these options by establishing a college fund for their child to one day use. Personally, I was able to get a free ride with a scholarship program that Louisiana offered if your ACT/SAT scores were high enough, but not every state offers that. It is worth looking into what exactly your state provides so you know how to supplement accordingly.
When should you start saving for your child’s college fund?
Ideally, every family would be able to start saving for their child’s college fund as soon as they are born – or even before, if at all feasible. However, the reality is that this ideal scenario simply isn’t feasible for most families, so the better answer is: “as soon as you are able to”. When you have space to contribute to a fund without causing strain on your existing budget, that is the “right” time to start. For us, we decided that when George started school to begin saving. We figure we have 14 years from now to when he goes to college.
How much do you need to save?
Let’s be clear, every dollar saved towards your child’s college is a dollar that they won’t have to borrow in student loans – so this is very much a case where every little helps. However, if you want to get a better idea of how you should save to achieve a particular savings goal by a certain date, the education calculator at Pigly.Com and similar sites is a great place to start. With the full facts and figures behind you, you can then plan a savings strategy that suits your – and your child’s – specific requirements. I love to suggest that grandparents when asking about gifting presents give toward this fund instead of buying plastic that will be forgotten a year from now. Every little bit counts! Also, look into your state’s college fund accounts. Most states offer some type of matching 529 programs where there will contribute a percentage of what you put in. It is one more way your money or any gifts from grandparents can go further. All my Florida readers can read more about our state’s 529 plan here.
Is it worth saving for a college fund, when a fund might not be necessary?
Many parents worry that starting to save for a college fund might not be worth it, concerned that their child might not choose to attend college, could receive a full-ride scholarship, or that free education might become a policy introduced by a future administration. If you share these concerns, then worry not: saving for a college fund is just another type of savings, and you can do so without fully committing the funds to be used for one specific purpose. If your child ultimately decides not to use the fund for their education, then the funds can be repurposed, perhaps to fund their living costs while studying or even as a downpayment for their first home. It’s therefore still worth having a “college fund” in place, even if it is never used for “college”.
Hopefully the above has provided some useful starting points which will assist you in your college-fund-related plans in the future. I would love to hear about how you are planning for your child’s future!
