7 Reasons to Create a College Fund for Your Kids Now





Even if your kids are still in diapers, the realities of the cost of a college education will be upon you before you know it.  Eighteen years will go by in a flash and you’ll be facing tens or hundreds of thousands of dollars in fees to secure a higher education for your kids.  Although many students will have to take out loans (and take on debt) in order to complete their schooling, you can certainly do your part now to make sure they have a little less burden when the time comes.  You are, after all, responsible for their well-being (and you certainly don’t want to be saddled with the outrageous bills that come with acceptance into prestigious universities).  Here are just a few good reasons to start contributing to the college fund the moment you bring your bundle of joy home from the hospital.

  1. Save a little now, save a lot later.  Even if you’re only putting $100 a month into savings, you’ll have socked away over $20,000 (plus interest) by the time your child is ready to go off to college.  Can you imagine having to cough up that same amount on the spot because you didn’t bother to save a dime?
  2. No debt.  Can you imagine how different your life would be if you had come out of college without owing a single cent?  You could have put a down payment on a house sooner, started your own business, or even just set off into the world with a clean slate.  You can do that for your kids.
  3. Tax-free savings plans.  Many states offer plans specifically aimed at encouraging parents to save for the future education of their kids.  There will be no write-off for money put into the account, but it will grow interest-free and can be withdrawn tax-free to pay for tuition and other college expenses down the road.  And if your child gets a scholarship, you can withdraw an equal amount of money.
  4. Rising cost of tuition.  Did you know that the cost of tuition is going up at twice the rate of inflation?  So even if you’re receiving cost-of-living increases annually at your job, you will still be behind when you have to start paying for your child’s college education.  That’s a pretty big incentive to get on the ball.
  5. Increased earning potential.  If your child is able to graduate from college, they stand to earn twice the money of someone who doesn’t (or more, in some cases).  This makes the likelihood of them living in your basement until they’re 30 much smaller.
  6. You can’t count on financial aid.  Federal funding for low-income families is great, but you may not be eligible (and who knows where the government will be in another 10 or 20 years).  Don’t count on any help.
  7. Compound interest.  Whether you start a standard savings account or you opt to purchase certificates of deposit (CDs) every six months, you can earn on both the money you put in and the interest it accumulates.  Just a note: long-term CDs (up to 5 years) will net you the best percentage, although they tend to top out around 3%.

Sarah Danielson writes for PO Financing you can grow your business and pave the way for more.


  1. These are great reasons. Me and my hubby have been thinking about starting funds for our kids. You can never start too early!

  2. Andrew says:

    I wish my parents set up a fund for me. Even 1000$ to cover books for me. They certainly could afford, they just chose not to. Oh well. I’m doing fine.

  3. shauna says:

    This is a nice blog especially to the parents. It gives them realization about the future of every child. I will definitely share this to my friends. Thanks for the post.

  4. casey says:

    We all know that college nowadays are very expensive. That is why this blog is perfect for the parents who wanted to give their best quality of education to their children.

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