Sunday, November 30, 2014

Four Tips to Start Saving for Your Child's College Education


Did you know that the 7 of 10 students graduating from college, and the national average of student loan debt for college graduates college was nearly $30,000. This statistic does not even include those students that did not graduate, nor does it include those that are graduate students working towards Masters or Doctorate degrees. For someone like myself, that figure is only a small fraction of the actual total of student loan debt.



The Institute for College Access & Success complies data each year via their The Project on Student Debt, which is published online for those to read and learn about. In 2012, the average debt levels for all graduating seniors with student loans rose to $29,400 , which is a a 25% increase from $23,450 in 2008. It increased 25% in SIX years.



That does not even surprise me, in the slightest bit. For a great number of reasons that I won't delve into on this post, I chose private institutions for undergraduate and graduate school. Both schools were out of state, which added an additional layer of required expenses. However, to go to college, even an in-state school or even a community college, I knew it was going to be inevitable that I would have to take out student loans.

According to The Project on Student Debt, in the year 2012, students graduated with the following average student loan debt:
• At public colleges, average debt was $25,550 — 25% higher than in 2008, when the average was $20,450.
• At private nonprofit colleges, average debt was $32,300 — 15% higher than in 2008, when the average was $28,200.
• At for-profit colleges, average debt was $39,950 — 26% higher than in 2008, when the average was $31,800.
Yes. These figures are 2.5 years old. And the thought of having children going to college in about 15+ years? I don't even want to estimate or project the potential costs. Because of my student loan debt and the average gains in average student loan debt, my husband and I prioritize saving for our children's college funds. I'm going to share a few tips that we have been doing in order to save for our three children, so they aren't burdened with the stress of the loans I have to deal with for the next 30+ years. And do I mean stress. My student loan payments, once they all reach their full payment amounts, will be at least 2.5x my monthly rent living in a moderately expensive suburb of Phoenix. Seriously.
  1. Start savings accounts as soon as you can after your children are born. Why save in that adorable piggy bank when you can save at the bank and build interest? Make that money work for your children! Capital One's 360 Checking and 360 Savings are fee-free and earn interest, so you can get started early for your little one's future!
  2. Save it all until children want to spend. The little bit of money each of your children receives for their birthdays and other gifts from aunts, uncles, and grandparents, put ALL of it in their college savings until they're old enough to want to save it up to spend on something. A one year old child doesn't know that their $20 from their grandparents ends up in their savings account. As soon as you get those checks in the mail? IMMEDIATELY deposit them. With Capital One 360, they provide a remote deposit capture with the Capital One 360 CheckMate tool and make savings a snap with the Automatic Savings Plan.
  3. Earmark a small amount of money from your paychecks to go to savings accounts. Before I was placed on bed rest back in May, I would have a portion of my paycheck direct deposited directly into my savings account. I liked odd numbers, so I would have $130 direct deposited, so I didn't have to actually "touch" it to move it. I then moved a small amount of that ($15 each paycheck) into her savings account. I was busy and needed it to be done for me, so it truly never felt like it was "my" money to spend. What's really cool is that there's programs like Capital One's 360 Savings or 360 Checking options, which are designed to save consumers time and earn money! These are great; because, I was always squirrling a little bit of money away for her each month, without making it feel like I was "losing" anything by doing that saving.
  4. Windfalls. Any nice windfalls that your family comes across, save a portion of that as well. If you come across a $100 windfall, put $5-10 into their savings accounts. It's a windfall, so it's not like it should already be earmarked for something else. Remember, this is your child's future we are talking about. That $5-10 isn't a big deal. That's a coffee or lunch out. That's ALL it is. Put that aside for your children! You can squirrel away windfalls that include rebate checks for making purchases, new bank account bonuses, referral bonuses (more kids? new accounts... up to a $40 bonus!!!) and closing cost credits if/when you or someone you love closes on a home loan/mortgage.
So, what do you think? Aren't these all pretty easy? Do you have any additional tips to help others build their savings?



Be sure to follow Ramblings of Mama via Facebook, Google, Instagram, and BlogLovin 
for more exclusive content, reviews, giveaways, crafts, and mama tips!



Disclosure: I was selected for this opportunity as a member of Clever Girls and the content and opinions expressed here are all my own. Financial compensation was exchanged for this posting. Ramblings of Mama will always provide honest opinions, beliefs or experiences on products reviewed. We will only recommend products or services that we feel are of benefit to our readers.
This disclosure is done in accordance with the Federal Trade Commission 10 CFR, Part 255 Guides Concerning the use of Endorsements and Testimonials in Advertising. If you have any questions, please contact Michelle RamblingsOfMama{at} gmail {dot} com

8 comments:

  1. GREAT TIPS! I WILL PASS THEM TO MY DAUGHTER> I THINK ITS TO LATS FOR ME MY KIDS ARE ALREADY 15 & 17 MY DAUGHTERS KIDS ARE 3 & 1 SO MABY SHE HAS A BETTER CHANCE WITH THESE TIPS THEY ARE WONDERFUL. I WISH SOMEONE WOULD HAVE TOLD ME ABOUT THEM WHEN MINE WERE BABIES. BLESSED BE & HAVE A SAFE & HAPPY HOLIDAY SEASON

    ReplyDelete
  2. Those are good tips. If the child decides not to go, the money can be given when they get married, get their first apartment,whatever. Or, if they don't know about it, you can take that vacation you've always dreamed of!

    ReplyDelete
  3. This is some great advice for college. It is never too early to start and looking into a college fund.

    ReplyDelete
  4. I always save money for my daughter. We have been tight on cash this past few months but we're doing pretty good now. I put away $10 a week for her and I plan on opening a CD for her when I have enough to put on it. Then we will continue to add money to her stash until we can get a few of them for her. I attend college and it's been very expensive for me. Would have been nice if my mom saved for me!

    ReplyDelete
  5. I agree you have to start saving from day one. These are great tips and I will share them with friends & family.

    ReplyDelete
  6. This is so important thanks for the tips

    ReplyDelete
  7. These are all good tips for saving money for college. College is so important to get ahead in life.

    ReplyDelete
  8. These are great tips. I especially like the one about saving money from relatives, that's smart.

    ReplyDelete

Thanks a bunch for your comment love!