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How to Budget for College Savings

Create a budget and make it a habit to save for college.

Like most people, you probably have lots of expenses and you don’t have a lot of extra money. But developing good money management habits early will always pay off. Start now by trying to find money in your budget to put away for college savings. Get your child in the college savings habit, too. It’s their future we’re talking about here!

Start with The College Planning Toolbox. It has tools like the College Cost Calculator and the Future Savings Calculator to help you create your plan to save for college.

Create a Budget  


Set your savings goals

The first step in budgeting your money is to set a savings goal. Here are some helpful tips:

  • Learn from others. See how other families are saving and paying for college with ‘How America Pays for College’ and ‘How America Saves for College’.
  • Write down your goal. For example: “By the time my student is ready for college, I’ll have saved $15,000 toward tuition.”
  • Set a target date for your goal. If you’re starting early it might be something like this: “I’ll meet my goal when my student graduates from high school in 12 years.” Do a reality check from time to time to see how you’re doing versus your goal.
  • Find ways to save even more. Upromise® by Sallie Mae® is a service that lets you earn cash back for college when you buy everyday items online, travel, dine out, and more. It’s free to join. If you’re making purchases anyway, put them to good use and earn cash back for college.

Money management tips

You may not have a lot of extra money in your budget, but that doesn’t mean you can’t save for college. Here are six helpful money management tips for getting your college savings efforts off the ground.

Tip 1: Watch for daily money drains. Drink regular coffee instead of a latte once a day. Bring your lunch three times a week. Take the money you’re saving from small but important changes and put it toward your child’s college savings.

Tip 2: Save for college little by little. Use the money you are saving to make multiple, smaller contributions to your college savings, rather than a single, large contribution. Start with as little as $25 a month, because even a small amount over time adds up.

Tip 3: Save for college automatically. Make saving a priority. Deposit your budgeted college savings contribution from your paycheck right away, or set up an automatic debit plan. That way you’ll be less tempted to spend it on spur-of-the-moment purchases.

Tip 4: Get tax advantages where you can. 529 college savings plans, Education Savings Accounts (ESAs), and other vehicles offer tax breaks that can help your money work harder.

Tip 5: Ask family and friends to help. Instead of another toy, ask loved ones to celebrate birthdays and holidays with contributions to your child’s college fund. There are gifting programs that let others make contributions directly to a college savings account so you’re not on your own. This is an easy way to boost your savings with the help of others.

Tip 6: Don’t use retirement savings for college! There's a wise saying, "You can borrow for college, but you can't borrow for retirement." Don't leave yourself without retirement funds in years to come.


What’s next

Learn how college savings plans can help you put a tax-advantaged savings plan in place


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