By Daniel Boylan, Instructor of Finance, Ball State University
This post was originally published August 19, 2014 on the America Saves blog
One of the most important goals for parents is to find a way to help pay for their child’s education.
Though most parents cannot afford to pay the entire bill, on average parents will pay about one-third of the college costs. Given there may be more than one child, this task is further complicated.
With raising tuition costs, how is a parent to come up with adequate funds for their child? I suggest that starting early is the best option so the funds have a chance to grow and time to compound. Really the most important task is to start. Yes, just to start. Too often, current situations or bills give us a reason not to start – and we procrastinate, but the best option is to commit to starting. Finding “free money” is also paramount. Free money is money that is not already committed or allocated.
Here are some suggestions on how to build savings for education:
You would be surprised how fast money will accumulate when enacting some or all of these items in a savings plan. Most of these items are designed to not force you to change your current budget or make a big sacrifice. After money starts to accumulate, there will be a positive energy that will encourage further savings.