Saving for College: How and When to Start

money tree growing out of a hand

Saving for College: How and When to Start

money tree growing out of a hand

When I was pregnant with my first child, I remember other parents saying “You better start saving for college the second he is born!”

But the truth is, I really needed to start saving at the thought of conception.

There’s an old saying by Mark Twain, “The secret to getting ahead is getting started,” but how many soon-to-be parents are thinking about saving for college that far ahead?

Creating the Groundwork for Saving for College

Saving for college is a lot like erecting a building. The foundation is what everything rests on.

When Keith and I first got married, we set some financial goals that would later prove to set us on track to live debt free. We knew we wanted to start a family, and if I desired to stay home and raise the kids, it would require good financial habits.

We realized the best time to save money is when you have money. We are both college graduates, choose to live very modest lives, and are committed to having a game plan. These were the financial “rules” we lived by that helped us start saving before we even started a family.

First, pay off your school and car loans.

Second, pay down your credit cards balances and never incur finance charges again.

Third, live off the larger income and save the smaller one.

How to Keep Up Financially When Having Children

Then we started having kids and time began moving fast.

They got out of diapers; started walking and talking; went to school for a full day; joined a sports team or school club; did their homework by themselves; worked hard to get good grades; graduated high school; off to trade school or college; moved out of the house.

And finally, started paying their own bills.

Having our oldest complete this cycle was very fulfilling as a parent.

He is thriving in a break-free stage of young adulthood. One down and three more to go.

The point is, childhood goes by lightning fast, so how do you keep up financially?

Parenting.com estimates that the average middle-income family will spend $12,000 on child related expenses in their first two years alone.

Isn’t that private school tuition? Maybe a mortgage? A car note? Or health insurance premiums?

Now, imagine we are raising a family of four active boys; who eat non-stop. Do the math; it adds up quickly.

So, where do you fit in saving for college?

Honestly, the best way to save is to not spend. We just keep track of where our money is going, plan for large purchases, and try not to keep up with the Joneses…unless the Joneses and other parents have some good tips on how to save as well.

Creating Your Family Team to Help Save for College

Families are a lot like teams. Keith and I are the coaches. Our roster includes our 23 year-old (BS Computer Science), a high school senior, a junior, and the youngest, who is in the eighth grade.

Each member brings something different to the team. Each role is important, and we hold each other accountable.

We call an occasional time out but support each other’s aspirations and are destined to win in this game of life. As coaches, we are responsible for developing the game plan and giving the team the plays to run.

So, as we are planning to save for college, we practice a lot. The boys know the drill when it comes to spending. Having control of spending means you set the game tempo and can score or save more.

Budgeting for Your Child’s Education

Earn. Budget. Spend. Save. Repeat.

To start the process, you need to ask yourself “What do I REALLY want when saving for college?”

That’s the million-dollar question.

For us, the REAL answer is we wanted to send our kids to college debt-free and stress-free. Yes, all of them. But how could we accomplish that?

Most families spend whatever they get and live paycheck to paycheck, so it’s hard to see how you can save enough money. When you budget and record, you know exactly where every cent is spent, and you can begin to look for ways to lower each category.

Leavedebtbehind.com states that the National Average for spending is Housing 24%, Transportation 14%, Food 14%, and Savings 9%.

Consider Dave Ramsey guideline percentages to get your spending under control: Housing 25-35%, Transportation 10-15%, Food 5-15%, and Savings 5-10%.

First, we took an honest look at our finances and money coming in and going out every single day.

We made traditional line-item budgets, but lowered the recommended living percentages.

Our actual spending plan looked more like Housing 15-20%, Transportation 5-10%, Food 5-10%, and Savings +25%, and today’s spending is much lower in all categories.

Even with two incomes, we chose to live off one, making sacrifices to save some money.

Make no mistake, you will have to be faithful to the budgeting process which became challenging once I became a stay-at-home mother.

Be aware of the little frequent expenses and stop the leak before you sink in debt. We also made sure to take advantage of bank saving options and employer matching programs.

Remember that it’s not just about how much money you make, but how much you save. Within a few years, we had enough for a full year’s tuition at a modest college.

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