When to Start Saving for Your Child’s College Education

One of the questions that many anxious parents ask themselves is this: When should I start saving for my child’s college education?

The answer, as it is for so many questions related to saving, is, “as soon as possible.” It’s never too early to begin saving for your child’s college education. Indeed, the sooner you start, the more time you will have for compound interest to work on your child’s behalf.

Learning from other cultures

Certainly, there is a lot for the west to learn from the rest in order to create a better balance in the world.

The problem is that the rest is fast becoming like the west thanks to technology. This is not surprising with 300 years of domination based on the famous words “Cogito, ergo sum” – “I think, therefore, I exist”.  We need to understand the history of all this in order for us to reorient our thinking which may enable us to learn from the rest.

Rene Descartes separated mind and matter and said that the world has to be described objectively. Here, he provided no role for the human observer. He wrote; “All science is certain, evident knowledge. We reject all knowledge which is merely probable and judge that only those things should be believed which are perfectly known and about which there can be no doubt”.  Isaac Newton, John Locke and other thinkers built on this philosophy to seal the fate of our modern world. In effect, the mind rules and the heart lost its place.

The dominant notion is that the universe is a machine and has no spirituality and conscience attached to it. With the heart playing second fiddle, the rational human can manipulate and exploit the universe to meet its own ends using science and technology.

This Cartesian philosophy based on scientific truth seems to dominate western culture. Not understanding the limitations of this has created the current imbalances in nature and society. Certainly, the modern conveniences and longevity we enjoy can be attributed to Descartes but it has fragmented and divided our world.  

The human ego has been given prominence, which has led to a separation of our mind with everything around us. So we continue on our consumerist binge without realizing the harm it is causing our society and environment. This disconnect is extended to everything in our life whether it is healthcare, energy, transport, education etc..

Western philosophy has encouraged us to neglect our intuitive nature in place of technical skill, intellectual power and scientific knowledge. Money has become the currency of this power and we have neglected the power of wisdom, spirituality, good values and ethics.

So naturally, we will ignore all consequences of a lifestyle based on money as it has become the value with which success is measured.

I witnessed this stark reality as I visited Canada for a few weeks in July. Many people live in a kind of upper middle-class bliss worrying about when to buy the latest technology ridden car, computer or the mobile phone when they have a perfectly good one already.  They are cajoled by the media into a life of consumerism which keeps the economic cycles moving in circles. Most are unaware or unmoved by the realities of much of the rest of the world eking out a meagre existence living on one dollar a day.

This is not much different in developing country urban areas too now, thanks to globalization and westernization

 What value can the west get from the east to enable change?

Eastern philosophies are based on notion of interconnectedness. We are all a part of one system interdependent on each other, be it humans, animals, trees, water, the sky, sand, rocks – in fact the entire universe. The human is not at the centre of this universe.

We are only a tiny part of the system and we cannot manipulate it using our mind and technologies without having consequences and an impact on the system.

However, we have an ego that helps to give us a sense of security, however falls it is. Recognizing and dealing with this ego is a part of the mental development process that eastern philosophies promote.

So how can we learn from the east?

One thing the eastern philosophies teach us is to become mindful and aware of ourselves in what we say and what we do. Be present to the here and now.  One way to do this is to take control of the mind which at any time is a hive of activity.

Meditation is a practical way to taking control of our runaway minds. It will help to focus our mind and to realize what is and is not important. When we can control our mind, we can look at what we fear in a different light, as fear motivates us most. We are afraid of change. By controlling our mind, we begin to accept that life is impermanent and that change is imminent. One day we will be no more.

Taking control of our minds may help us to control feelings of jealousy and hatred that arise every so often towards other people. Then we realize that fear is the root cause of those too.

Taking control of our mind will help to open up our heart. That way, we can learn to be more tolerant and understanding as we realize that we are but a tiny part of the universe. When we realize our insignificance, our egos will be humbled.  Then we may realize that all the money, the nice houses, the cars and gadgets in the world will not bring us true happiness. True happiness comes from an open heart – being grateful for what we have, being generous, having love and compassion towards all that lives around us.

So, certainly, the west can learn from the east. West can learn to focus on self not to hoard in the name of liberty and freedom but to become mindful of thoughts, words and deeds and realize that we have to balance our heart and the mind.  This fusion between the west and the east is bound to bring peace to this world.

Start as Early as Possible

Some people scoff at the idea of starting a college savings account when a child is still an infant. After all, isn’t it a little ridiculous for an infant to have a 529 plan? It’s not silly, though. College costs continue to rise, and there is very little that can be done to stop them. At the same time, scholarships and other forms of financial aid are becoming scarcer. That means that, like retirement costs, college costs are going to be increasingly on the family to cover.

Start saving as early as you can. Even if you can only put a few dollars in each month, that’s better than nothing. Many college savings plans can be set up to automatically take as little as $25 out of your checking account each month. While that $25 a month may not grow into enough to pay for an entire four-year degree, it can still provide a significant amount of the funds your child needs to pay for school. Besides, as you earn more money later, you can increase your contributions to the savings. The important thing is to get started.

Get Your Child Involved

You should also encourage your child to become involved with college savings. As soon as your child begins receiving an allowance, he or she should be learning to save for long-term goals like college. Help you child set aside some of his money for the future. It may seem silly to have your child set aside $1 out of his or her $5 allowance each week for college, but the important thing is the habit. Your child is learning the importance of saving for a far-off goal, and developing a valuable skill.

When your child gets older, and begins his or her first after school job, it is important to encourage him or her to continue setting money aside. Add it to the 529 plan, and it will add to your contributions and speed up the ability of the account to earn money. Your child needs to feel involved in the process; if it is something that comes “free” to him or her, a college education may not be as valued.

In the end, though, you might not be able to save up enough to completely pay for college. However, the earlier you start, the better position your child will be in financially when he or she finishes school. Even if the college savings are supplemented by loans and scholarships, they can still play a big part in college funding. And the earlier you start, the bigger that part will be.

Jess Wright, from credit matching service SimplePayday says, “While you don’t want your child to be burdened by debt, it also doesn’t make sense for you to ruin your financial future when your child is likely to be able to pay off modest student loans.”

Get them to contribute (a bit)

When it comes to kids and money, there are a number of opinions regarding how to best help them get ahead. You want your child to have the best financial start possible, but at the same time you don’t want to enable him or her to the point that he or she remains financially dependent upon you. Plus, many parents feel that there is a lot to be said for teaching children the value of work, rather than giving them everything.

As our children grow, the questions about how much we should do for them shift from those related to allowance and chores, to those related to how much parents should pay for college. While it would be nice to be able to pay for a college degree, many parents can’t afford it. So, it makes sense to prepare teens as early as possible for the possibility that they will have to help shoulder the costs of a higher education.

Ways to Help Your Teen Pay for College

My parents made a deal with me and my siblings: They would pay for housing and a meal plan if we were responsible for our own tuition. Because the expectations were set down early on, I knew that I would be responsible for my tuition. I worked toward getting scholarships, and had my tuition paid for at university. This was one way I could help myself pay for college, without putting the burden on my parents. (Later, I was hired as a resident advisor in the dorms and paying for housing was no longer an issue for my parents.)

You can also help by encouraging your teen to contribute to a 529 plan. You can contribute, of course, but you can also teach your child the value of saving for his or her own future. Plus, the investment nature of the 529 plan also serves to illustrate the power that prudent investing can have to help your finances. My son knows that, when he reaches his teenage years, a portion of his pay check will go to the 529 we started for him nearly two years ago. We also encourage him to do well in school and hope he will try for scholarships. He will be helping to pay for his own future.

Taking Responsibility for Education

One of the reasons I think it is so important for teens to help, in some way, to pay for college, is because taking the responsibility for their education can encourage them to make the most of it. Many students do poorly in college, failing to learn anything, because they don’t have any skin in the game. I noticed, among some of my college friends, that those who had to work to pay for their college valued it more — and didn’t waste as much time.

On top of that, you don’t want to sacrifice your future. Look at your finances. Imperilling your finances to pay for college is likely to be disastrous when you are ready to retire.

Bottom Line

The key is planning ahead. Talk to your children early about saving for school and get them started working toward the goal early on. You can save up for college as early as possible, and encourage your teen to contribute. This will help protect your finances, create less of a need for student loans, and teach your child responsibility and a degree of self-reliance.