The prospect of paying for higher education can be intimidating, especially as costs continue to rise, but you may be surprised at the difference you can make by saving regularly. And saving for college ahead won’t significantly impact your chances of getting financial aid. The more you save and the earlier you start saving for college, the better.
Not sure if you can fit saving for college into your monthly budget? Listen to other families who have had positive experiences with savings. View video
Set a clear goal that you can attain within your particular timeframe.
Use a notebook, spreadsheet, or smart phone app to track personal and household spending for a month. Determine what you can eliminate and add to your college savings with your newfound funds.
Start saving as early as possible. Use time to your advantage.
Add saving for college to your regular budget, like saving for retirement of paying your household bills.
Set up regular, automating transfers to move money in to your savings account. Increase the amount every time you get a raise.
If you receive a bonus, tax refund, or other unscheduled income, set a portion of it aside for college.
Get your children involved: ask them to save a certain portion of their allowance or earnings from after-school jobs.
For special occasions like birthdays, ask family members to contribute to your children's college savings plans.
Review your monthly credit card, cell phone, bank account, and utility statements for any monthly extraneous fees that you can eliminate.
Save and roll your change and deposit it at the bank.
Avoid impulse purchases/spending. Make a shopping list before you leave the house and stick to the list.
Bring your lunch to work. You can save up to $2,500 per year.
Continue to make childcare payments into a savings account or investment account after your child enters school.
Save money by skipping the bookstore and using your local library.
Use coupons. Buy items on sale. And shop online for better deals.
Custodial accounts like UGMAs and UTMAs are owned by a minor but managed by a custodian – usually a parent or guardian. Funds may be used for any expense that benefits the child, not just school, and the child ultimately controls the account.
Use a Coverdell Education Savings Account to save for qualified education expenses at elementary schools, secondary schools, and colleges or universities. Distributions are tax free as long as they're used for qualified education expenses.
Savings accounts and CDs are an easy and relatively safe way to save, although any interest you earn will be taxed.