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  • Dave Kinzer

When Should You Start Saving For Your Children's College Education?

Having kids is expensive. You’ve got pay for their needs, like food, clothing, and visits to the doctor and medicine, for example.

Then there are a lot of expenses that aren’t necessities, but they just seem to come with the territory: toys, books, car seats, athletic equipment, summer camps, and bigger houses and cars.

There’s one more expense that a lot of parents aren’t sure how to approach: college.

Parents of young children wonder if it’s too early to save for college, while parents of teenagers wonder if it’s too late.

Some parents think it’s hopeless, reasoning that at the rate college expenses keep rising every year, they’re not going to be able to come close to saving enough money, so why even try?

And you have another group of parents who are counting on their kid earning thousands of dollars in scholarships to cover the cost.

Of course, some parents are just crossing their fingers that taxpayers will be footing the bill by the time their child is 18. (This is sometimes erroneously referred to as “free” college.)

I wouldn’t blame any parent for thinking along any of those lines.

But let’s say you are expecting to have to pay for at least some of your child’s college expenses. In other words, you’re not counting on a full ride or any so-called “free” college.

How high a priority should saving for your child’s college expenses be?

It all depends on your current financial status and goals.

It’s great that you want to help your child pay for college, but first, you need to make sure you are meeting your financial goals.

It’s important to remember your child’s college education won’t help pay your current monthly bills. It won’t help pay for any emergencies, like a flat tire or a furnace in need of repair. Neither will it pay your mortgage or your bills when you’re ready to retire.

The financial benefits of a college degree go to the degree holder, not to his or her parents.

If you are considering starting an investment account for your child’s college expenses, but aren’t sure if you’re ready, consider the following questions.

Are you able to pay all your bills on a regular basis? Do you have an emergency fund that can pay all your bills for at least four months? Are you debt-free (except for your mortgage)? Have you started saving for your retirement?

If your answer to any of those questions is “no”, then I’d say you shouldn’t put money aside for your kid’s college expenses yet.

There’s only one exception I’d make, and that is for the last question. If you haven’t started saving for your retirement, but you have a job that will provide a pension when you retire, it’s probably fine to start saving for your kid’s college.

I’d still recommend you invest some money for retirement to supplement your pension, though.

If you answered yes to all of those questions, then saving for your child’s college expenses is a logical financial goal you can strive for starting now.

Don’t be afraid to start even if you can’t invest a large amount every month. Fifty dollars a month earning 8% for 18 years adds up to over $26,000.

If you’re ready, I’d recommend you start a 529 College Savings Plan with Illinois’ highly rated Bright Start program (You don’t need to live in Illinois to open an account with Bright Start. To read my in-depth review of Bright Start, click HERE.).

Go to for more information.

Every parent wants to give his kids an advantage when it comes to paying for a college education. It’s a fine goal with good intentions, but just be sure to take care of your finances first.

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