A Parent’s Guide

to Planning & Saving for Your Child’s Future

Continuing education after high school can mean a lot of different things: a traditional 4- or 2- year college or university, as well as technical training or other certificates that lead to successful careers. No matter which path your child chooses, all of these options require prior planning and financial investment. And no matter what your child’s dreams are, your support and engagement is critical!

That can seem overwhelming, but if you make a plan and understand the different ways to pay for college—whatever form of education after high school your child might pursue—you can make it happen for your child.

This Guide will help by providing practical tips to help make saving for education after high school a reality.

Some Common Questions

What does it mean to save for college?

Saving for college—again, all kinds of education after high school—means setting aside money for your child’s future college education. Being a college saver isn’t just a one-time thing; it’s an identity. Saving for college requires a commitment to investing in your child’s future through regular contributions to a college savings account.

Why save? And why save now?

Every dollar saved is a dollar you don’t have to borrow and repay with interest. While there are many ways to pay for college—through financial aid, loans, scholarships, work-study, and saving—saving is the one avenue you can directly affect throughout your child’s development.

Saved money can grow.

The earlier you start saving, the more time your money has to grow. Whether you choose to invest your college savings or simply let it accrue interest, the earlier you start saving the more potential that money has to grow.

Saved money increases the chances your child will attend college.

Children who have money saved for college are more likely to enroll and graduate from college. If your child has more than $500 in savings designated towards education, he or she is 3x more likely to enroll in and 4x more likely to graduate from college. Why is that?  It helps to create a college-bound identity and a college-saver identity.  Knowing that money is to be used for education increases your child’s expectation that he or she will attain that education.

Saved money helps your child do better in school.

Regardless of family income, students who have money saved for college do better in school.

It’s never too late to start saving.

Whether or not you’ve made regular contributions to your child’s college savings account, it’s never too late to get started or to renew your commitment to being a saver. Remember: every dollar saved is a dollar you don’t have to borrow and repay with interest.

The effort you’ve made to save for college will have a significant, positive effect on how you pay for college. Your child’s college savings account will reduce the need to take out loans and limit the financial burden loans may bear on your child upon graduation.

Learn about how to set aside money for emergencies

We all need to have a little money set aside for the unexpected. How do you make room in your budget, and what are some ways you can set aside some money for emergencies? See this link for some great ideas!

How do I save?

There are many different ways to save for college. You’ll need to decide what type of savings account or plan makes the most sense for your family.

Regular Savings Accounts

Open a savings account with your bank or credit union and start setting aside some money when you can. Birthdays and holidays are a great time to ask family members to help!

Investment Accounts

There are several kinds of investment accounts that can be used for college savings: IRAs (including Roth IRAs), Coverdell Accounts, and 529 Plan accounts. Each has its own advantages and disadvantages. Do some research, talk with the experts, and see if one of these accounts might be right for you.

Families interested in making their own investment in their child’s future education should consider opening their own account. There are numerous college savings plans available to families and each family can select a plan that is best suited for that family. If a family wants to make their own contribution to their child’s future education through the NextGen 529™ plan, they need to open their own account. If they choose to open a NextGen 529 account, Maine’s Section 529 plan, then they can receive statements which show both the Alfond Grant and any family contributions. For more information about Maine’s section 529 plan, visit NextGenForME.com.

ASF is not an approved distributor of NextGen 529™.


Saving for Education After High School

Tips to Get Started

Whatever path your child takes to continue education after high school, getting started on saving early can make a big difference.  Even if you understand the importance of saving for your child’s future education, it can be a challenge to fit saving for college into your budget or routine. Check out some of these tips and tricks to become a more effective saver.

  • Start early. Putting off saving for your child’s college means you’ll miss out on interest and growth on your money. 
  • Make a savings plan that’s right for your family. Your local bank is a great resource where you can meet with experts who can talk with you about making a plan.
  • Family conversations about money: Most of us grew up in houses where parents and kids didn’t talk about money together — but that meant missing an opportunity to help your child learn about money and how it works! Here’s a link that might help you get more comfortable with these conversations!
  • Write down your savings goals on a calendar with your child. The benefits are twofold – you’re more likely to save if you write down your goal, and your child will see the commitment you’re making towards his or her future.
  • Make saving for college a budget item. Figure saving for college into your regular budget like paying for household bills or saving for retirement.
  • Evaluate your expenditures. Look for areas in your budget where you can cut costs and redirect those funds into college savings.
  • Make your savings goal-oriented. Set savings goals with a definitive timeline and monetary goals. It’s easier to meet a goal of saving $500 a year or $25 a month than the broader goal of “saving.”
  • Set it and forget it. Set up automatic transfers from your paycheck into your college savings account. Make it easy to contribute by setting up an automatic transfer…and forgetting it.
  • Redirect unscheduled additions to your income directly into savings. This could include raises, tax refunds, or bonuses.
  • Use freed-up money. If a regular expenditure ends (such as daycare or car loan payments), reassign that extra money in your budget directly to savings, before you have a chance to get used to the extra spending money.
  • Save on schedule. Mark your calendar to contribute every major holiday and birthdays.
  • Track your spending and saving. Use a notebook, spreadsheet, or smartphone app. Making a budget helps manage money, whether you have a little or a lot to work with. Check out this link to learn more!
  • Avoid impulse purchases. Wait a day to buy purchases. If you still want the purchase, you can go back and get it.
  • Find additional ways to save. Save money by bringing your lunch, borrowing books and movies from the library rather than renting them, carpooling, using coupons, or shopping sales. Put any money you save into your college savings account.
  • Make saving a group effort. Involve your family and friends by encouraging contributions to your child’s college savings account for birthdays, holidays, or other significant milestones.
  • Track the value of your college savings account. It’s encouraging to watch your money grow as your child does, and it will help keep you motivated.
  • Think about opening a 529 plan account. Take advantage of incentives or matching funds it may offer.

No matter how you save, you should feel confident in the investment you’re making in your child’s future. Every dollar saved is a dollar you don’t have to borrow later and repay with interest.


What Else Can I Do?

There are additional things you can do to set your child up for future success. Here are some tips to get you started.

Support Your Child Academically

The money you’re saving for your child’s college education is an important first step to helping your child achieve his or her dreams. As you continue to support your child’s dreams financially, there are many other ways to play an active role in helping your child’s dreams come true.

  • Get your child to school everyday and on time.
  • Help your child develop good study habits. Suggest keeping a calendar, writing down due dates, and studying for tests ahead of time.
  • Make sure your child has a quiet space to do homework and study.
  • Talk to your child about what he or she is learning at school.
  • Ensure that your child is taking challenging courses.
  • Connect with your child’s mentors or teachers at school.
  • Keep an eye on your child’s grades, and help him or her get extra help, if necessary.
  • Volunteer in your community together.
  • Help your child identify his or her interests.
  • Encourage your child to try new things.
  • Model responsible financial behavior.
Prepare Your Child for Lifelong Learning

There are many ways to support your child as a learner. These tips aim to help you:

  • Ensure that your son or daughter enrolls in diverse, challenging courses each year.
  • Make sure your child meets with his or her school counselor to talk about their academic future.
  • Talk to your child about what he or she is learning in school, and check in from time to time on his or her homework.
  • Help your child find and commit to extra-curricular activities that interest him or her.
  • Make note of and help your child prepare for standardized tests such as the PSAT, the ACT, and the SAT.
  • Talk to your child about why learning is important to you. Share what you learn in your adult life, what you are reading, or what you wish you knew more about.
  • Research post-secondary educational opportunities with your child.
  • Discuss the benefits to education beyond high school with your child.
  • Encourage your child to set academic goals every year, and support your child as he or she works towards these goals.

Preparing for the First Tuition Bill

When your child is younger, your focus will be on putting aside money for college. But as your child gets closer to college, it’s time to learn about additional ways to pay for college. The best way to prepare for paying for college is to have an understanding of the resources available to you and your family.

You’ll see lots of information on this website about how to plan and pay for education after high school. Check out this link for a great overview!

The price of college listed on the website is called the sticker price. Don’t let the number scare you! Most families do not pay this price. The price of college to families after financial aid, grants, and scholarships is called the net price. In addition to savings, here are some of the ways families pay for college:

Financial Aid and FAFSA

Financial aid helps families pay for college. Financial Aid typically includes federal grants, loans, work-study, and institutional grants. Federal grants are need-based funds that you do not need to repay. Institutional grants may be need- or merit-based and vary based on the educational institution.

The Free Application for Federal Student Aid (FAFSA) determines eligibility for federal financial aid and most scholarship programs. The FAFSA launches October 1st of the year prior to college enrollment and is available at www.fafsa.gov.

Loans

You or your child may have to borrow additional money to pay for college. Since loans need to be repaid with interest, it is important to only borrow what you need.

There are many different types of loans, and understanding the terms and interest associated with each type is important before making a decision to borrow. 

The federal government, state agencies, and private banks or financial institutions are the three major sources of education loans. Federal loans tend to offer low interest rates and flexible repayment options, specifically for families with demonstrated need. 

For more information on loans, check out the College Board’s resources.

Private or Outside Scholarships

A private or outside scholarship is money granted by local, state, or national organizations and businesses. These scholarships are usually awarded on a merit basis and do not have to be repaid. Scholarship money may help reduce loans or pay for school supplies and books.

Tips for applying for private or outside scholarships
  • Read the eligibility requirements carefully. Some scholarships are only for students intending to study engineering, or born in the month of May, or the first in their family to attend college.
  • Note the scholarship deadline. You don’t want your child to miss out on a chance to win money!
  • Look for local, state, and national scholarships. School counselors and principals are great resources for local scholarships, but online scholarship databases are helpful in finding national scholarships.
  • Understand how outside scholarships may affect your financial aid package. Check the financial aid policies of your child’s college or university regarding outside scholarships.
  • Keep all application materials. Many scholarships have similar prompts or requirements. Saving essays or resumes as inspiration for other scholarships can help speed along the application process
Student Contributions

Your son or daughter may contribute money from his or her own savings or a summer job to help pay for college. Your child may contribute directly to tuition fees or use that money to pay for additional costs – like books and school supplies. 

Depending on your family’s financial aid package, you son or daughter may also enroll in a work-study program. Work-study programs are part-time jobs for students offered as a part of federal or college financial aid.


Learn More

Check out our blog for articles on the many ways you can help your child build a bright future.

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