Top 10 Best Tips for Saving Money for College

College-TipsThe cost of college has been getting higher and higher over the years. Students are now submerged in debt that they spend their lives and careers trying to erase. Parents of a baby born today would have to save $385 a month in order to afford housing and tuition at the average state school, according to Kent Smetters, professor at the University of Pennsylvania’s Wharton School. If you don’t start saving until the child is in middle school, the required monthly savings amount jumps to $780. (source) I don’t know about you but I don’t have an extra anything hanging around.

  1. Start Early – The earlier you start the more you’ll save. That’s just the simple mathematical truth. 
  2. 529 College Savings Plan – A 529 Plan is an education savings plan operated by a state or educational institution designed to help families set aside funds for future college costs. It offers some great tax benefits.
  3. Get your kids saving – Teaching your child to start saving early is a must. There are some great ways to do this but the point is to do it. Some families start early for this purpose. The money they save goes to college or even an automobile when they can drive. Imagine your relief if your children can save for everything themselves.
  4. Make it a habit – If you get yourself used to setting aside money for savings then it will be much easier every year. Even families that live paycheck to paycheck should try to set aside what you can. A little amount is better than nothing.
  5. Have a smart kid (or an athlete) – Students that work hard, graduate early and with high achievements are more likely to receive scholarships. My sister graduated at the age of 16 and received a few thousand dollars from local businesses to attend college. If your child is good at a sport or other performing arts taken seek out the scholarship options.
  6. Prepay – Some schools allow you to prepay your child’s tuition. It’s becoming more rare because as rates increase schools want to make their money. But if you are sure your child will go to a state school then it could be very beneficial because you lock in the rates of today instead of when they enter into college. Just beware, if your child doesn’t end up going to the state school you may not get all of your money back or be paying high cancellation fees for withdrawal.
  7. Upromise – Upromise is a fantastic and easy way to save money for college. Register your store cards (Publix, CVS, Kroger, etc.) to receive store rebates. Register your debit and credit cards and when you eat at participating restaurants you’ll earn a percentage back. The more you eat out the more your percentage rises. Shop online through the Upromise site to earn cash bak on your purchases. You can even invite the friends and family to pitch in. They can register their cards and give you everything they earn. It’s SO easy.
  8. Custodial Accounts – These are account that you set up in your child’s name that you can control. We’ve recently set up a custodial account for our oldest. We’ve emptied her piggy banks and birthday card money into this account. It earns interest each month and one day she’ll have
  9. Coverdell education savings accounts (ESA) – Coverdell ESAs function very much like an IRA but for education, not retirement purposes. You make a contribution of up to $2,000 a year with post-tax dollars. The money grows tax-free, and neither the contribution nor the interest is taxed when you make a withdrawal, as long as you use it for education purposes.
  10. IRA and Roth IRA accounts – Traditional IRAs come in two forms — deductible and nondeductible. With the deductible IRA, your annual contributions are tax deductible, but when you withdraw money from the account, you’ll be taxed on both your contributions and your earnings. With the Roth IRA, your contributions are not tax deductible, but your earnings are tax-free if you withdraw them after the required five-year holding period and use the money for qualified expenses such your child’s college tuition.

Hopefully these tips will get your in the right direction. Even if you’d like to start small with something like Upromise just remember that at least you’re doing something!

This information sourced from Genworth Financial and myself.

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  1. starting early is key!

  2. Thanks for sharing, I really need to do some of these and soon especially since I’ll have two in college at the same time!

  3. Janet Dubac says:

    Thank you for sharing this post! Really helpful.

    As a parent I surely would love to be able to provide my children with the best life they can have.
    And although more and more people are devaluing college education, I still believe that being able to send my children to college is an important part of helping them get the best opportunities and more fulfilling and stable careers.

    I would certainly keep all these tips in mind. Thanks again!

  4. this is great information
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  5. I feel bad that I have not saved anything and my son is 15
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  6. Great tips!!! I love save money.

  7. We need to start saving for my son.
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  8. Thanks for all the tips for saving money for college.
    Crystal @ Simply Being Mommy recently posted..Tiny Toon Adventures Crazy Crew Rescues DVD ReviewMy Profile

  9. #5 is kinda funny but what every parent hopes for.
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  10. Great tips! Thanks for sharing.
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  11. Thanks for the tips!

  12. Thanks for these tips. I plan on going back to college this year and my daughters might be starting in a few years.
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  13. hubby has roth IRA too but i don’t know much about them
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  14. thanks for sharing. It’s time to start!
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  15. This post is extremely helpful. Thank you.
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  16. No way I can budget for this. I better find a sugar daddy…lol
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  17. Ugh…I would love to be able to pay for my daughter’s education, but unfortunately, that just isn’t a reality for most people. I am saving money to help her when she is off to college, but she will still need to get student loans or a job.
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  18. Ty @ Mama of 3 Munchkins says:

    Thanks for sharing!

  19. Elizabeth Atwood says:

    These are some great tips! College is soooo expensive. I want to do everything I can to cover the costs so Nick won’t have to deal with the cost later in life. I even started a CD with money from an inheritance we got long before Nick was even a thought! I also use the UPromise credit card which makes getting some extra money easy.

  20. Great tips!
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  21. The cost of college is crazy.
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  22. Excellent tips!

  23. Wonderful tips!
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  24. great tips since the cost of college is insane now a days.
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  25. Starting early is the key, but you can start anytime. I just started this week after taking over a 10 year break.
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  26. I totally suck at saving for college. In my family, no one ever pays for their kid’s college education, so it’s not a pressure I feel. I do want to help my daughter as much as possible though, so we are saving a little each month to put towards her first 4 years. :) I’ve had a upromise account ever since they first started!
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  27. Great tips!!!
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  28. Great tips. Another thing to keep in mind is that you can’t save to much for college. What if they want to go for their Masters or another degree. Save, save, save. That’s our motto.

  29. We placed our bets on #5 and it looks like for us it might pay off :) Our daughter scored phenomenally high on the PSAT and it looks like she might get a National Merit Scholarship, the school of her choice gives a four year all expenses scholarship for NMSF. What a relief it was to see a high score in the mail on that test!
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  30. Thanks for the tips.

  31. Great tips!
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