Teach Your Kids about Planning and Saving for College
As a parent, you know there are many important lessons to teach your children—and learning to save is certainly one of them. Though college may be down the road for your kids, getting them involved early on in the saving process can help signal the importance your family puts on education—as well as the value of good saving habits generally.
Consider these useful tips to help make college a shared family endeavor:
Filling the Piggy Bank
The benefit of saving early can be immense. Our article "Lots of Ways to Get Started" points out that even putting $1 dollar away daily for a whole year over the course of 18 years, compounded annually at 5%, would result in over $10,000 in savings (before taxes and fees).1 Five dollars a day, compounded the same way, would yield over $55,000—enough to cover tuition, room and board at a 4-year public university.1 Encourage your student to think about what they can do, even in a small way, to supplement your regular savings plan—because every little bit counts.
Encouraging your children to save money from their allowance, birthday, or holiday gifts will instill good saving habits early—habits that ideally they’ll maintain throughout their life. It’s valuable for your children to feel some ownership of the college savings process, particularly as they get closer to college age. Yet surprisingly, just 30% of parents with children age 15 or older participating in our “College Within Reach” poll said that, to a great extent, they are encouraging their older children to find employment to help absorb college costs. Employment, in the right balance with their other obligations, can be a good way for your children to take shared responsibility for their own future.
Nearly nine in 10 parents in our “College With Reach” poll said that they have talked to their children about the importance of education to a great extent. It’s an encouraging finding. Teaching your kids to save is only half the battle; just as challenging is instilling an appreciation of higher education’s value. Be sure to talk to your kids not only about the importance of pursuing higher education, but also about the opportunities that a college degree creates. And there isn’t just one way to get there: from a four-year private college to community college to vocational school, there are a wide range of satisfying higher education options worth exploring.