How to Start Saving for College Early

“Education is not the filling of a pail, but the lighting of a fire.” ~ W.B. Yeats

If there’s one thing you can be certain about for the future, it is the increasing cost of education. If you already have kids, or are planning on expanding your family, then planning your child’s college education savings should be one of your top priorities. When it comes to expenses for higher education, you can never start saving too early.

If you’ve already been mulling over starting a savings plan for your child but haven’t put your plans into action yet, now is the perfect time to get started. After all, time is key when it comes to saving. Start early and you’ll be surprised at how much of a difference it makes.

Why Should You Start Saving for College Early?

• Rising Cost of Education - Statistics show that your child’s education is likely to cost 3 to 4 times what it costs today. With college fee structures rising exponentially, your best bet is to start saving immediately. If you start saving from your child’s first birthday, the amount that you save and the interest that you earn on it will be substantially more than if you were to start when your child turns 5 or 10.
• Saving for Retirement - Most financial experts stress the importance of saving for retirement, giving it more importance than saving for your child’s education even. This is probably because your child will still be young and have more options for figuring out college education payments than you will have in your old age. Therefore, it is important for you to plan for retirement being an expense along with your savings for education.
• Saving Is Better Than Borrowing - It’s always better to save for your child’s education than to have to borrow money through loans or other avenues. This probably holds true for any major expenditure. The biggest reason for this is that when you save, you earn an interest, which actually ends up contributing significantly in helping you achieve your savings goal. On the other hand, when you borrow, you end up paying an interest for the sum borrowed.

Easy Saving Tips for Your Child’s College Education

1. Start Early, Save Big - If you start early, even a modest amount of money set aside every month adds up to a lot later. Studies and statistics show that if you start saving as soon as your child is born, at an average rate of 5%, 37% of your savings goal will come from the interest alone! Now that is certainly not a sum that should be ignored. But if you start saving only once your child enters high school, the interest will contribute to only 10% of your savings goal. So, start early and watch small amounts contribute significantly.
2. Set a Savings Goal - If you decide to start saving for your child’s education as soon as your child is born, it is common for your biggest question to be: How much should you save? It is imperative to set a savings goals when you start. This helps you stay focused on what you need to achieve and track your progress. The amount you choose to save by the time your child turns 17 will depend on your child’s college decision.
3. Save Regularly - No matter what, do everything in your power not to default on putting the decided amount of money aside every month. Be committed to your goal and make saving a regular habit. This will go a long way in helping you reach your goal and not feel the burden once this habit becomes a part of your routine.
4. Save Automatically - With the number of roles and chores that you juggle on a regular basis, it is possible to overlook and forget putting aside the money every month. You can make things easier for you by setting standing instructions for money to be automatically debited on a regular basis.
5. Increase the Amount You Save - As the years go by, it’s more than likely that incomes will also go up. Make the effort to increase the amount you save as and when this happens. It’s more than likely that even expenditures will go up, but even the small increase in the amount you save will prove beneficial later.
6. Save Windfalls - Any windfalls that come your way should also make their way to your savings! If not the entire amount, make sure that a good portion of your windfall goes straight to saving for your child’s education.
7. Investment Plans and Strategies - Read up on all the various plans like the 529 College Savings Plan to help you with your savings. Do not hesitate to ask questions and find out everything about a plan before you go all out and invest in it. For bonds, ensure that the bond maturity date is not after the tuition bill is due!

With these easy college saving tips, you can rest assured that your child’s college education will not be an uphill task that will leave you in debt. Timely action and a commitment towards fulfilling your goals will ensure you and your child can get the best! After all, wouldn’t you love it if your child could study in one of the top 10 colleges in the US?