A few weeks ago, my daughter received an acceptance letter from Auburn University! Time to raid the child’s college fund! But first a little back story.
We are so excited about this because she’s wanted to go there since she was around 12 years old! The application process was not too bad, but it did require that we sit down and give it careful thought. It required that we remember all of her accomplishments, both from an academic and extracurricular standpoint. I was up against of bit of resistance from her because she is quite modest and didn’t think flying a plane this summer or being on the Mock Trial team was a big deal. Duh!!! Yes it is sweetie pie!
I had to give her a pep talk and be the cheerleader through the process.
Being accepted is one thing, but attending is quite another because of that little thing called money. Attending a top school means having to come up with top money. Auburn is an expensive school if you are not a resident. Paying $5,000 (in-state) vs. $13,000 (out of state) per semester is not anything to sneeze at. Personally, I just don’t want her spending the rest of her life paying off college debt, whether it’s student loans or living expenses.
But while this is my hope for her, the harsh reality is she may assume some debt in her four years at Auburn. Beyond student loans, I can help her mitigate potential college debt by teaching her to be smart about how she manages her money and ensure she knows the basics about managing a checking account. This quick quiz helped me assess what my daughter should know before she goes away to school.
Truth be told, I have not done all I can do to prepare financially for this moment. Had I saved just $100 a month in a 529 savings account (extra helpful glossary in case you are unfamiliar) from the day she was born, she would have $21,600 in the account. If her father had done the same, she would have $43,200 ready to use. This does not include any interest that may have been gained or any fees that may have been assessed to maintain the account.
Additionally, if I had added money from my tax refunds or other windfalls, the 529 plan balance would have been even more. Saving $100 a month for your child’s education is not much if you are working and living a middle class lifestyle. Sure, things happen, but having that focus is priceless for their future.
If that amount seems like too much, and/or you have more than one child’s education to think about, consider these ways you could come up with the money for their education fund.
Bundle or Eliminate Services
If you have separate phone, cable, and internet service you could bundle them for a reduced bill. Take the difference and put it in the education fund for your kids.
Use Cash Only for Purchases
Studies suggest you spend less when you spend cash. Use the envelope budget system to pay your bills and make your purchases. The savings you will see can be put into the education fund.
Shop Once a Week with a Menu Planned and Full Stomach
Grocery shopping more than once a week adds up in food cost and fuel cost. Plan your trip for once a week or try to stretch it out to every two weeks. Additionally, plan your menu for the week and create your shopping list from it. You will likely save money because you will only buy what you need. Never go shopping when you are hungry. Why? You will put way more in the cart than you need because you are shopping from your hunger rather than from your list. These savings tips are easy to use and the savings, of course, can go into the education fund.
There are plenty more ways to save for your child’s education. I urge you to begin saving now so you are not caught in a situation like I am at the moment. This calculator from Regions Bank can help estimate how much you’ll need to save. We are applying for scholarships and she has a partial GI Bill education benefit she can use. I will likely withdraw part of my IRA for her so she is going to be fine. But who likes dealing with financial pressure and stress? Save yourself the trouble by opening a savings or 529 account today. And be sure to speak to a competent family financial planner sooner rather than later.
This post was sponsored in part by Regions Bank. The content and opinions are my own.
Samantha A. Gregory is an author, consultant, and speaker. She’s a single-mom lifestyle, money, and parenting expert featured in The Washington Post, The New York Times, Essence Magazine, HuffPost, ABC News, and Mint.com.
Samantha founded the award-winning RichSingleMomma.com™, the first online magazine featuring personal finance, parenting, and personal development content and courses for single moms.
She aims to inspire women who are ready to thrive and not just survive in their single motherhood journey. Connect with her on Instagram @richsinglemomma.
