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A Mom's Guide to Securing Your Child's College Future

A Mom's Guide to Securing Your Child's College Future

March 01, 2024

As a mom, protecting your child's future is a top priority.

One significant part of that future is college/university, which of course comes with a hefty price tag.

Even the College Board knows it, and released this chart in November 2023:

College expenses can be overwhelming.

But with strategic planning and saving, you can pave the way for your children's academic success without breaking the bank.

In this blog post, we'll explore ways moms can save for their kids' college education (and make this journey a little less terrifying).

 

Start Early: The Power of Compound Interest

One of the most powerful tools for your savings is time, and starting early can make a huge difference.

The longer you save, the more interest you can collect on your savings.

Compound interest is like a snowball effect for your money. As time passes, not only does the original amount earn interest, but then the accumulated interest also starts generating additional earnings.

Compound interest works in your favor when you allow your savings to grow over an extended period.

Your money can make money, and then that can make money too!

Open a college savings account as soon as possible, and contribute regularly to take advantage of this compounding effect.

529 Plans: Tailored for Education Savings

Consider enrolling in a 529 savings plan, a tax-advantaged investment account specifically designed for educational expenses.

These plans offer various investment options and grow tax-free as long as the funds are used for qualified education expenses like tuition.

Research and choose the plan that aligns with your financial goals and risk tolerance.

Working with a trusted financial advisor can make this step easier. Contact Malecki Financial Group for more information!

Automate Your Savings: Set It and Forget It

Moms often have a lot on their plates, making it easy to get wrapped up in those busy daily responsibilities.

Automating your savings can be a game-changer. Set up automatic transfers to your college savings account, making a consistent contribution without the need for constant monitoring.

You’re already keeping an eye on your kids, you don’t need to be watching all your accounts nonstop, too.

This approach makes saving a seamless part of your financial routine. Check your banking app to see how you can automate this step today.

Cut Unnecessary Expenses: Trim the Budget Wisely

Take a closer look at your monthly expenses and identify areas where you can cut back.

This doesn't mean sacrificing quality of life, but rather finding smart ways to save.

For example, consider preparing meals at home, exploring more cost-effective entertainment options, and being mindful of impulse purchases. It can be hard, that’s for sure!

Just remember to redirect the money saved towards your child's college fund.

Encourage Gift Contributions: Special Occasions = Special Savings

Instead of traditional gifts for birthdays and holidays, encourage friends and family to contribute to your child's college fund.

Especially when they are young, and when you don’t need more toys cluttering up the living room.

Many 529 plans allow for gifting, and these contributions can add up over the years. It's a thoughtful way for loved ones to contribute to your child's future success.

Plus, it keeps the house clean! Win-win!

Scholarships and Grants: The Hidden Gems

While not a traditional savings method, actively searching for scholarships and grants can significantly offset college costs as it gets closer.

Encourage your child to work hard academically and participate in extracurricular activities to enhance their eligibility for financial aid.

Applying for FAFSA is a strong place to start on the federal aid front.

Every dollar saved through scholarships is a dollar less you'll need to withdraw from your savings.

 

Saving for your child's college education is a marathon, not a sprint. It takes time.

By incorporating these strategies into your financial plan, you'll be better equipped to navigate the challenges of funding higher education.

Remember, every dollar saved today is an investment in your child's tomorrow, and as a mom, you're laying the foundation for a brighter and more secure future.

You’ve got this!

Investors should consider the investment objectives, risks, charges and expenses associated with municipal fund securities before investing. This
information is found in the issuer's official statement and should be read carefully before investing.


Investors should also consider whether the investor’s or beneficiary’s home state offers any state tax or other benefits available only from that state’s
529 Plan. Any state-based benefit should be one of many appropriately weighted factors in making an investment decision. The investor should consult
their financial or tax advisor before investment in any state's 529 Plan.

And if your darling child chooses against college, don’t panic. We’ve got that covered, too.