Tips for Saving for Baby's College FundKatie Loeb
In our relationship, my husband is the fiscally responsible one. He pays the monthly bills because he knows I have a fluid relationship with due dates. I often like to think of them as suggestions, and thankfully my husband takes the more rational, responsible definition. And so it’s no great surprise that he’s also the one who suggested that we start saving for Elijah’s college fund now.
What I didn’t know was that when he made that suggestion, he had already managed to tuck away over a thousand dollars. My first thought upon hearing this sum was that he had robbed someone because we are decent at saving, but that much money in 5 months is kind of amazing, and then he shared his method. And suddenly I’m feeling a lot better about my son’s ability to afford a higher education some day.
Here’s how we’re saving:
1. Set up a separate savings account that you will not be tempted to access. We are the current owners of 3 savings accounts. The first is one we’re funneling money into each month to pay back our parents for borrowed funds. The second is our personal savings account in case we fall on hard times. The third is Eli’s college fund.
2. Set an automatic deposit into that account each month. Even if you can only do 10 dollars a month, that’s 120 bucks a year and it’s a start. We have 100 going into each of our savings accounts, but we started much smaller than that.
3. Increase the monthly amount whenever you get a raise. We’ve basically increased our automatic deposit so that each time we got a raise, we haven’t felt it, but our savings accounts have. I know that sounds kind of sad, but we’re making ends meet and we know how to live on this budget, so we’re able to increase our savings easily.
4. Keep a change jar in your house. Empty your pockets and wallet into each day and when the jar is full, take it to one of those automated machines and put the resultant cash into the savings account. Eli’s account has almost 200 bucks from my husband’s change jar. And we don’t even notice that money that we’re literally leaving in our pockets otherwise.
5. Immediately deposit any money given by family members into the savings account. We got several checks at baby showers and after Eli’s birth that would’ve been easy to deposit into our checking account and use for diapers or wipes, but instead we deposited them into his savings account.
6. Find an account with a high interest rate. This is one area we’re still working on. My brother-in-law is a financial advisor, so he’s looking into the proper type of account for us, but since Eli won’t be touching this money for 18 years, it can accumulate a fair amount of interest if in the correct account. Talk with your banker or if you have a financial guy at your job, they might be able to make suggestions, too.
What are you strategies for saving for your child’s education?