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All parents want to give their child a leg up in life – and a big part of that process involves saving for your child’s college expenses. Here are some things to keep in mind if you are considering starting a college fund for your child.

Start As Early As Possible
It is never too early to start saving for your child’s college education. If you save $20 a week from the time your child is born until he or she graduates from high school, you will save $27,000 at a 4-percent interest rate. If the savings is increased to $50 a week, you will save $68,000 over the same period of time.
If you are able to save $2,000 annually from the time your child is 1 year old, you could have as much as $80,000 by the time your child is 18, with roughly an 8-percent annual investment return. Even if you don’t start saving until your child is 7, you could save as much as $40,000. Every dollar saved early will only decrease your child’s later dependence on loans, grants or scholarships to pay for his or her education. While loans are used regularly by college students, they are often not the best choice to pay for college.

Involve Your Children in the Process
If you can afford it, you should certainly contribute to your child’s college savings. But teaching children to save money at an early age encourages good saving habits and allows them to also contribute financially to their educational future.

When should you start talking to your child about college? For some, it’s a conversation that isn’t brought up until high school. But when you begin talking about and saving for college in grade school, students begin to see college as something they are going to do – not as something they may or may not do.

Students also become more accountable when they contribute to their college fund. When it’s their hard-earned money going toward their education, the student is more likely to study hard and, as a result, get more out of the degree.

Don’t Neglect Other Savings
While starting a college fund will put your child on track to a brighter future, it may be rendered useless if other areas of financial planning do not have a strong foundation. Here are some important tips to keep in mind as you move forward in building your child’s college fund:

  • Your retirement security must come first. Many parents neglect themselves when putting money aside for college. But while your child has options such as loans, scholarships, ROTC or GI Bill assistance, no one is going to lend you money to live on in retirement. Make sure you are able to reduce all your debts except a mortgage, pay off credit card debts and adequately fund retirement accounts. Only then should you be aggressively funding college savings.
  • Don’t skimp on insurance. You can be saving as aggressively as you like, but if you lose a significant source of income due to death or disability, it’s all for naught. Make sure you at least have adequate term insurance in place, and some protection against disability. If your employer doesn’t provide it, you should look to the individual markets.

If your plan is to someday send your child to college, then savings should be a priority, but also remember that it should be a realistic goal. Something is always better than nothing, so determine what you can afford to save for college and set your goal accordingly. If you’re ready to start saving, visit a trusted financial institution to discuss savings accounts.


Florida State University Credit Union has been maximizing members’ financial well-being since 1954. Today, FSU Credit Union serves its more than 24,000 members with eight branch locations throughout Tallahassee and north Florida, secure online banking, a convenient mobile app and a complete suite of account types, loans and services to meet every financial need. If you have questions about the content in this blog post, contact at (850) 224-4960 or 877-GO-FSUCU (Toll Free).

The content provided in this article consists of the opinions and ideas of FSU Credit Union, does not constitute legal or financial advice, and should be used for informational purposes only. Any decisions you make based on the information contained in this article is made in your sole discretion and liability. FSU Credit Union disclaims any damages or liability for decisions you make based on the information provided.