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A Mom’s Guide on How to Save for College

Did you know the average college tuition for in-state public college is $25,290 and for a private college is $50,900?

It’s no wonder that parents can have panic attacks thinking about their child’s college tuition if they didn’t start a college savings when their kids were younger. As a parent, one of the largest expenses you will save up for is your child’s college tuition.

Keep reading to learn all about how to save for college taking stress out of the equation.

A Mom’s Guide on How to Save for College

There are many ways to save for your child’s college tuition but one thing is true, the earlier you start the better it is. Many parents put off saving for college for “next month” which turns into next year or years later. Then they end up regretting waiting so long.

Some parents end up having to use helpful services such as Bonsai Finance when they wait until their child is about to be of age to enroll in college. There’s nothing wrong with taking out loans but the following list of options might work best for you and your family.

Education Savings Accounts 

Opening an Education Savings Account (ESA) is a great option to save for your child’s college tuition. You can save $2,000 (after tax) per year and it grows tax-free. 

The rates will vary on how much you earn based on the investments in the account but the rates tend to be higher than a regular savings account.

A plus with this type of account is that when you withdraw the money to pay for education expenses you won’t pay any taxes which is a huge plus. 

There are a few negatives to an ESA which include being limited to saving $2,000 per year, and the amount saved has to be used by the beneficiary by the time they turn 30 years old.

529 Savings Plan

This is another option where you will have tax-free withdrawals like you have with an education savings account. It’s best to start a 529 plan as soon as your child is born. Every time you add a monthly deposit you will benefit from the interest compounding, in turn, making your money grow faster.

There are even some states that give tax breaks for making contributions to a 529 plan. Make sure that when you start the 529 plan you have the option of changing the beneficiary to another family member in case your child decides they don’t want to go to college when they graduate high school.

This plan allows you to contribute more than $2,000 per year making it a better option for some families. You can contribute up to $300,000. 

Roth IRA

If you want to play it safe in case your child decides to not go to college this type of savings will allow you to tap into it for your retirement without any penalties. Any contributions made to a Roth account can be taken out penalty-free and tax-free at any time and for any reason.

This gives you more flexibility in case your child chooses a different route when it comes to what they do after high school. 

If the withdrawal is for educational purposes then you will avoid any IRS penalties. To avoid paying taxes on a Roth account you (the parent) will have to be over 59.5 years of age.


If you are feeling overwhelmed with all the lingo of different accounts then at least start with a savings account. Depending on how many children you have set aside a monthly amount that you will deposit into their savings account.

Anything is better than nothing.

Here’s an example: If you save $15 per month with a 1% interest you will yield $3,569 in 18 years. Like we said something is better than nothing and starting early is best. 

Every quarter or every year you can increase the amount by $5 or so and watch the money grow as long as you don’t touch it. The pro of going with a savings account is that you can withdraw for any reason it doesn’t have to be for education expenses. This is important to keep in mind in case your child once again chooses a different path when they are of college age.

Fund Only a Portion

Another option to make saving for your child’s college tuition less stressful is to only fund a portion. Go into your savings plan knowing that you’re only saving for a percentage. This can be whatever percentage you choose and let them pay for the difference.

This can also help them appreciate their college years and take them more seriously if they’re held responsible for some of the tuition. There’s nothing wrong with teaching them about finances while they’re going into their college years.

If you want you can even set the amount you will fund based on their high school GPA. For example, if they graduate with a certain GPA then you agree to pay for 75% and if it falls below that GPA then you pay for 50% and they pay the other 50%.

Happy Savings!

Now that you have the guide above on how to save for college it’s time to happily start saving. Remember you don’t want to wait until next month because sometimes next month never happens or something comes up. 

Sit down and come up with a goal in order to pick the best option for you. Even saving $15 per month and gradually increasing the amount will add up.

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