Outside of the public K-12 school system available in the US, education, whether in the form of early-childhood learning or a post-graduate degree, often comes at a hefty price. From the day parents begin planning for a new baby, they are often anxious about how they will afford their child’s education. As the rates continue to climb, it’s easy to see why so many parents are concerned about how they will manage saving for education. To top it off, many new Millennial parents are finding themselves in the tight financial situation of still paying off their own student loans while trying to save for their child’s future or cover the expenses of their preschool or daycare. While the idea of affording education can be overwhelming, a long-term plan will help you see that the costs are not insurmountable and you have many options at every stage.
Here are some ‘saving for education’ tips to help you plan ahead:
Early Childhood Education: Preschool and Pre-K
- Consider every gift a contribution. Upon a child’s birth, at their first birthday, and at major early-year milestones, family and close friends may give gifts of cash. Over those milestones and the first few years, these gifts can add up if you save them or invest in short-term CD’s.
- Childcare in New Hampshire is expensive. Setup direct deposits from your paycheck into a savings account earmarked for your child’s education. In 2016, Parenting NH Magazine researched that the average cost of infant care started at $984/month and $788/month for older children. Investing these funds in a high-interest CD account will grow your education fund even higher, and without risk.
College, Trade School, and Post-Graduate Education
- A similar strategy to early childhood education will go a long way toward college also, especially since you have more time to plan for it. The earlier you start, the easier it will be.
- The average cost of college tuition has been steadily rising for years. How much do you need to save for college? This college tuition calculator computes the amount you need to save each month in order to pay for college.
- Consider a 529 college savings account, which will allow you to invest at a pre-tax rate throughout your child’s life. Funds can be used for most educational purposes, so your child is free to choose practically any school or program they wish.
We hope that these tips will help ease your mind about saving for education. Remember, every little amount will go a long way toward helping your child receive a quality education. Looking for more savings tips? Subscribe to our e-mail newsletter.