Are You Saving For Your Child’s College Education?

One of the big expenses that comes with having kids is paying for college.  With the way the economy is today- and when looking at the statistics- it’s so important to have a college degree. Did you know that the median family income in 2010 for families headed by a bachelor’s degree holder (or higher) was more than double the median family income for families headed by the holder of a high school diploma only?  That is staggering!

I came from a family of non-college graduates. I went to one semester of college before dropping out to work.  I wasn’t sure what I wanted to do and thought that some time off to decide would be good. I never went back.

My husband came from a family of non-college graduates.  He got a good job out of high school that paid very well for him, but after we had our first baby he realized he’d need to do more.  It was only then that he got his college degree, but what a difference it has made for our family!

Sadly, the reality is if anything ever happens to him I don’t know what we’ll do.  I have nothing to offer any company that would pay a wage that I could support my family on.  It’s a terrifying thought.

I don’t want this for my kids. I want them to get a college education, get a great job that they love and can support their families on.  I want them to have that assurance.  This means we need to help them go to college someday.

My husband and I have discussed setting up a college savings fund for our kids for quite some time, but the thought of it is so overwhelming- especially with 4 kids!  Our budget is already tight, and thinking of how much we’d need to put into a fund to get them through college just makes me sick to my stomach. I mean, college isn’t cheap, and it’s getting more and more expensive every year!

BUT, my outlook has changed significantly since reading up on the Arizona College Savings Program #AZ529. Many of the thoughts and concerns I had about college savings plans held no water. For instance, (and yes, this makes total sense but I looked only at the big picture), beginning early and saving even a little bit is better than nothing at all.  If you start saving when your kids are young, you have many years for those little contributions to add up to quite a bit, especially when they’re gaining interest!

Time has already flown since having my first kid.  I blinked and he turned 8 years old.  Had we been saving for him since birth, we’d be 8 years ahead of where we are now.  And had we been contributing to an Arizona 529 plan, all of those contributions would have been tax free! That’s right, I said tax free.  You see, contributing to a traditional savings account means each year- come tax time- you have to pay taxes on those earnings.  However, 529 plans grow tax free, and Arizona residents may take advantage of the Arizona tax incentives on those contributions as well!

Statistics show that kids who know there is some sort of savings dedicated to their college education tend to be more certain that they’ll be attending college, and make increased efforts to their academic achievements.  It makes complete sense!  I want my children to go to college.  If it helps them to know there are funds for them to go to college, I want to be sure they have that reassurance.

Consider, however, if my child decides not to go to college. What then?  The beneficiary may be changed to another member of the family.  So, if we save, say, $10,000 from now until my oldest is of college age and he decides not to go, that $10,000 can be ‘given’ to our next child for college!  And let’s just say none of my kids decides to go to college. What then?  Well, that money can be taken out and used on non-higher education expenses.  There are penalties for doing so- a 10% IRS penalty and subject to taxation (on earnings only)- so, while you wouldn’t receive the full amount, you wouldn’t be out all of that money either.

I learned so much more about college savings and the AZ529 plans, but it’s far too much to share here. If you have children, I encourage you to look into your college savings plans options. Get started now! Set a goal. What do you want to save for? How much can you afford per month?  Get started with what you can, and do your best to gradually increase that amount over time. You’ll be happy you did, and so will your kids!

Disclosure: I received compensation for participating in this promotional campaign with MomSelect. Regardless, all opinions and thoughts expressed are my own.


  1. I'm so glad you looked into the state plan. That's what I was going to suggest when I started reading. We got the Florida Prepaid for our first three (of four), thinking we'd NEVER move out of state…and then we did. EEK! But, my second oldest is still using his plan, he's in Florida right this second. So even though it took my baby out of the state we're in now, at least I know he has the opportunity to make a firm foundation for his life early on. The earlier you start too, the better (in terms of affordability).

    And…if you want to take classes online at home at some point, to ensure you can earn your degree (you can go as slow as you want if you're working from home)…just in case you need it at some point, there are a ton of options for that too.

    Love your post. I'm totally pro higher-education. 🙂

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  3. 529 plans are great. A lot of states will let you buy them even if you’re not a resident so you can shop around! We’re thinking about going the Educational Savings Account Route. I’m afraid of leaving my money to the market, even if it is likely to grow.

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