I know many kids who grow up and go to college on their own dime, spending all their own hard earned cash for the next twenty years getting out of that debt. I also know of several kids who had a stockpile of cash they could use for tuition, even if they skipped a couple of years after high school, or even waited until adulthood. Then there are the fortunate few who never even pay for their own doctorate.
In any case, parents frequently feel they could do more for their children’s futures. The obviously easy way is to open trust funds and fill them with assortments of investments and set them up securely so that they can grow steadily for the next 18 years. Oh, wait. That’s not easy. Okay, so the easy way is to get a screaming good job and make tons of money so that when the time comes, $30,000 a year is a mere fraction of your income. Wait, that one isn’t easy either. Fine then. Remodel your home and add a few bathrooms so when the time comes you get greater value from that second mortgage and…ugh.
To be honest, there is no catch-all easy and complete one way to save money for your kids. What you must do is accumulate from several sources, including from your own income. Make money now, save for later.
I’ve heard of a few programs that work pretty well; you can open a 529 account, the money which can be transferred to private schools (some in part) and to public schools around the country, possibly internationally. You can find more information at SavingforCollege.com, but do make sure you do some of your own research, talk to your tax professional, and talk to a college financial aid office (any will do).
But apart from the institutionalized options, there are many things you can do as an individual.
Allow family members to open savings accounts jointly with your children’s names. If you have a parent willing and able to save some money for you, let them. Go with them to open the account, but don’t put your name on it. Allow that account to be their business, not yours. Now the normal response would be to count on this money, but don’t. Don’t count it. When the time comes, if they’ve spent all the money, it’s no skin off your nose, but if it’s there, better for your kids.
Request savings bonds instead of gift cards for your kids for holidays. These can just sit in a safe and make money. You can learn more about these at TreasuryDirect.com, but again, make it your business to research things first.
Encourage your children to enter scholarship contests or other contests with cash rewards, and consider entering some yourself. Grace Tierney with Writers On-Line has listed some resources of the free variety, though others require entrance fees. Inventor Spot keeps a calendar and forum discussing invention, science, and engineering contests. Photo contests are prevalent, but if you’re looking for a place to start you can go to International Photography Awards or Kodak. If you win some cash, stash it in an interest-bearing account or buy CDs, or put it in that 529.
Collect your loose change once and a while and put it in savings for your kids. The thing about loose change is that it has been forgotten and ignored, so it doesn’t impact your budget. It’s like the bank that rounds up your change and puts it in savings. You’re doing the same with your cash. Pennies are only worth one cent until they gang up.
Replace a couple of your bills and put the saved expense into savings. If you’ve been budgeting for the past few years for a safety deposit box at the bank, consider buying a fire-proof safe and putting the rental fee into a savings account instead. Cancel the magazine subscription you don’t read every issue of and read it from the library or online instead, and put the subscription fee into savings. The idea is when looking at your budget for extra money for your kids’ savings, you take things you have already made concessions for and replace that cost with something more important and more utilitarian. Never think: “That’s only fifteen dollars a year.” Think instead: “That’s an extra dollar a month to the future fund.”
And finally, when it comes time for the college search,
Image courtesy of slowitdown