Ways to Save for your Children’s Futures

tuition fees

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.”

Look differently. Try college programs like Disney, UPromsie (with rebates that can be redeemed for cash), or the Military(more here).

And finally, when it comes time for the college search, . Some schools have even made work study a major portion of their curriculum, like College of the Ozarks. To get these benefits, encourage your children to work while in high school, explore their own avenues, and do well in school. Remind them, in any case, that their education is their own, and your money and efforts are a gift of aid, not a free ride. You don’t have to put a hole in your pocket to provide the best for your kids. You can do some little things and let your children life take its course.

Image courtesy of slowitdown

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21 Responses to Ways to Save for your Children’s Futures

  1. counterpoint says:

    I don’t believe that parents should pay for their kid’s college. It’s not their job. I think it’s a disservice to teaching them responsibility for their money. If kids know in high school that they are going to need to pay for their own college, they are much more likely to come out of college with an understanding about money.

  2. dan says:

    I think parents have a responsibility to help their kids out. That doesn’t mean going into debt and paying for everything, but to leave the kids on their own means they will start out in life with a lot of debt. I don’t think that is a good thing.

    I paid for part of my kids education, but also made them responsible for other parts. I feel good about the way it worked out and my kids are much more financially savvy than I was at their age.

  3. gloria says:

    So how much should a parent contribute? How do you determine a fair amount to help? I’m just starting to save for my two kids and it would be nice to know a general number I should be shooting for.

  4. duncan says:

    My parents didn’t pay for my education and I still resent that they didn’t. They had plenty of money to do so, but they decided to take trips for themselves instead. So while they were vacationing in Europe, I was working my ass off waiting tables and I still graduated with debt. It pisses me off that they left me hanging like that while spending all that money on things that weren’t necessary.

  5. dadof5 says:

    If any of my children expected me to pay and weren’t grateful for my financial help, they wouldn’t get a penny of my money. If they have gratitude, I’m more than willing to help out.

  6. greenday says:

    Students have a lot of choices when it comes to college. A good state school can be a fraction of the price of a private school. I offered to pay for the state school costs and if my kids wanted to go to a different school, they would have to make up the difference or could even get money if they chose to go a less expensive route. 2 went to state and the other to junior college, then to state so he graduated with several thousand dollars in his bank account.

    If you give children an incentive to choose, they can make their own decisions pretty well if you have taught them well while they were growing up.

  7. Denise says:

    I don’t think parents have the responsibility of paying for the education of their kids. If they want to do it, wonderful, but if they don’t, that’s okay too.

    My oldest son is at UT in Austin and has pretty much relied on scholarships, grants, and loans to get through school. I help when I can or when he needs a little extra money but he’s handled most of it himself. I don’t like the thought that he will have debt when he graduates and I hope to help him with that. We’ll see.

  8. Angela says:

    I’ve started my own investment account for retirement, but one of my questions before starting was whether or not I could use that money in the future to help my kids with college. The answer: yes. It would come out like a loan, and like a loan there would be interest to pay when repaying that loan, but unlike a loan, that interest would be going into my investment account as the loan was being repaid.

    I liked this idea, it helps me save for my own future while still giving me the opportunity to help out my children. I wouldn’t use it as a primary source of education funds because the size of the loan would depend on my budget allowances at the time the loan was taken, but as a recent college graduate myself I understand how much every little bit can help.

  9. fern says:

    It’s unrealistic to expect a 16 year old with no work experience and the best prospects for a job likely to be minimum age to pay the full tab for college which could run upward of $100,000 at a good private college.

    That being said, i worked part time all 4 years i was in school, and summers too. i was fortunate in that the school i attended was generous and had the ability to give me a mix of grants, scholarships and loans.

  10. ptrf says:

    @ gloria

    I don’t think there is a rule of thumb number for this. A lot depends where you think your child will go to college since costs vary tremendously. I think most children would appreciate any help, so putting aside as much as you can each month is worthwhile and you shouldn’t worry if it is enough or not since scholarships and grants are available.

  11. bigboy says:

    I think a lot of kids today take it for granted that their parents will pay. If they do, it’s because their parents haven’t done a very good job of teaching them the realities of making money and finances.

    It really bothers me the entitlement complex a lot of the younger generation has these days. And I blame most of that on their parents.

  12. Nascar says:

    It is not the obligation of the parents to pay for a kids tuition. Besides there’s plenty of good schools that do not require 30k per year. I have known individuals who turned down Harvard due to the cost, while another Ivy school gave them a full ride.

  13. down&out says:

    The real issue is the huge cost of education. if they could make college costs more reasonable so more people could afford it without parents having to cough up all their savings, then this entire conversation wouldn’t need to take place. As it is, the next generation is graduating in debt that’s hard to escape.

  14. sly says:

    Like with all things related to personal finance, it takes organization to wade through all the college financing options. Those that wait until the last minute and aren’t willing to look for unique ways to finance college end up paying more. There is a lot of financing out there if you know where to look and are organized enough to apply.

  15. I agree with Dadof5. It all depends on whether you have taught your children the value of money. If you have, they won’t take your help for granted. Therefore it doesn’t become a life lesson in that late stage. Then it is up to your own personal financial circumstances whether you can and want to help your children out.

  16. Candee says:

    I always believed that children weren’t asked to be born. Therefore, I do believe that it is the parents’ obligation to educate their children to the extent of their financial ability to do so.

    A college education is becoming a necessity rather than a privilege. If we want to stamp out poverty, education is the only way it’s going to happen. If we bring children into the world, it is our duty to prepare them to participate in it. Thinking they are here for our own pleasure is the height of selfishness.

  17. Audrey says:

    I’m not only a parent of a Kindergartner, but I’m also working my way through college. My husband and I both joined the military so that we could have the money to go to college, but it doesn’t even come close to covering the expenses, so along with whatever extra money from our incomes we can scrape together, we’re also taking out loans (albeit small ones) to make up the difference. Because I have this unique “insight”, my husband and I are determined that our son will have enough money to go to at least a state school. Given the course of recent military events, we DO NOT want our son having to enlist like we did. So not only am I paying my own tuition right now, but also socking away a little each month for my son. However, should he choose not to go to college or onto some sort of post-secondary education, we’ll have a nice little chunk of change to add to our retirement – the only way he gets the money is in the form of us paying for tuition, books, room & board!

  18. Monika says:

    I really don’t understand why parents think they are not responsible for their children’s college education costs. Just because kids turn 18 and legally become adults, it doesn’t mean the kids are ready to be out the door and start their adult life with debt. Yes, it teaches them to be more responsible and hard working, but it also teaches them to be more resentful of their parents, and in lots of cases become distant from their parents. If the kids were taught the value of money, they’ll be appreciative and will not take your help for granted. They will most definetly return the favor one day. Just my tought.

  19. daniel says:

    I agree on the comments made positively towards the parents and children, especially #18. My parents had 12 children and all went to college with the hardship work of my dad. Now, all the favors are being returned to my parents. All the children pitched in and bought our parents a brand new home and paid for. Then my parents gets free round trip vacations to Europe, Asia, Bahamas, Hawaii, etc.. all over the states from us (12 children). So, it is important to help your children, as they will help you when you become old. We even offer our parents to stay in our homes when they are really old. We don’t want our parents to stay at nursing lonely home….. Children are important. Treat them right with responsibilities and respect, they will respect you til you die. When you have children, it’s all about them, not you. If you think it’s not you responsibility, why have children in the first place?

  20. aburva says:

    Pet-owners do everything for their pets-after all they are like children who never grow up. No pet owner ever questions this phenomenon-& rightly so.

    We bring children into this world-so I am aghast there are some who think we ought not to help them settle down in life in any which way we can-including helping them with their education loans

  21. Hi, just so you know, the link under my name on this blog is out of date. Writer Online ceased publication in Jan 2007. I do still provide contest entry details via my ebooks – see details at my site or blog http://www.wordfoolery.wordpress.com
    thanks, Grace

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