In one of our blogs, we looked at an aspect of the college planning process that is overwhelming for many parents: the cost.
How can families afford college without breaking the bank?
There are plenty of options available to help parents and students approach paying for college in a way that is financially smart–and sustainable. Factors like college selection, financial aid eligibility, and personal savings strategies can play a role in reducing your student’s out-of-pocket educational expenses.
Practical tips to consider:
Saving money early through savings accounts, CDs, or 529 Savings Plans can help pay for your child’s education.
Picking an affordable school can help reduce college costs, but you’ll need to balance your child’s educational priorities with your budget.
Federal and private student loans can shore up any gaps in college funding, but it’s important to understand rates, terms, and repayment options. Each one has different benefits.
Parents, how did you cover for your kid’s college cost in a financially smart way? Share your tips in the comments below!
Both parents in this family worked full time jobs. When college time came, one income was dedicated to paying the college costs.
We didn’t have any college savings, but we fully funded to the max our retirement accounts. We figured if needed, we would have a decent nest egg to continue to earn interest IF we needed to cut back on the retirement contributions during college payment years. As it happened, we did not need to reduce our retirement benefits.
We know we were fortunate to have two decent incomes that could be split between paying for college and paying our living expenses during those big money years.
Prioritized saving for college (after retirement, but before spending on other things).
Started saving for college early (primarily 529s).
Lived below our means to accomplish
never had debt other than a house mortgage which we paid off early
did not hire people to mow the lawn, buy expensive coffee drinks, go out for expensive meals (found all the deal night around!), etc
did lots of DIY
stayed in our orig house (didn’t even realize financially recently how well that worked for us)
didn’t buy the most expensive house that we could/bought below what we could “afford”
maintained house, cars, etc so they lasted longer
bought used cars (2-3 years old) and not high end ones and note high end versions of the we ones we did buy
had the budget talk with our kids before the college search started; the budget was in-state tuition; we weren’t taking out loans and neither were they - I don’t remember if we told them that, but we probably did. lol
This was on less than a 6 figure combined income. I think we had a pretty good balance of saving and enjoying life.
Could we have had more “fun”? Yeah, but we didn’t know we wouldn’t lose jobs, etc. And spouse was a little tunnel vision about money. Could we have saved more? Yeah, we have some “stuff” that we could have done without.
It’s pretty straight forward. Im not sure there are any tips other than the obvious ones outlined.
You save what you can - most people do this in a 529 plan. If you cant save, you’re either paying out of pocket, getting loans, or find a cheaper school.
Besides saving money (the original intent) it’s an excellent way of conducting a “financial autopsy” every year. Where does the money come in and when; where does the money go and why; are the savings and investments on target or below.
I am amazed at people with relatively simple tax returns (no K-1’s, no royalties, no exotic investments) who pay someone else to get a handle on their finances. Then college rolls around and it’s a huge shock that they haven’t saved what they thought they did, that their income hasn’t kept pace with their spending; that the much vaunted “I’ll just write it off” isn’t a legitimate write off….
I think the word “sacrifice” is too strong but I guess you might call it that.
We did what everyone else here has mentioned.
Began saving early. Three 529 accounts.
Bought an affordable home even though the ones we wanted were more expensive. Fixed everything ourselves. Paint, fencing, installing 1 efficient window at a time.
Dad volunteering for overtime work.
Coupon clipped almost every grocery item. (No name brands for cereals.)
Maintained 12+year old cars with local mechanics when needed.
Video rentals with popcorn made in large pans at home.
No trips other than backyard camping.
Lots and lots of library visits.
Volunteering our pool for YMCA swim lessons in order to get free swim lessons for each kid.
The Y didn’t have a community pool yet and asked local residents to volunteer their pools in exchange for free swim lessons by certified lifeguards.
Getting in line extremely EARLY at the Community center to get free tennis lessons for 3 kids every summer.
We always planned to pay for our kids’ college. We didn’t have much in savings because I had stopped working when our first child was born & we always prioritized retirement saving. We lived within our means and had only a modest mortgage payment. After researching college costs, we helped our oldest identify schools that we felt would be affordable if I returned to work.
I started substitute teaching here & there when they started high school. I worked almost every day as a substitute teacher the year they began college, because it wasn’t easy to get a job … I was older & it was the start of the financial crisis. Between meager savings & my earnings, we were able to cash flow school, enrolling in a monthly payment plan.
At the start of their sophomore year, I found a full time job - it wasn’t high paying, but it was enough to pay college costs and save a bit for child number 2, who is three years younger. My earnings went toward college, and eventually I was able to save what wasn’t needed for college in my retirement account.
We were a dual income family for many years but lived off of H’s income. We only used his income for mortgage/budget calculations so lived well below our means. Every cent I made went into investments. We both maxed out our retirement accounts too. 529s were started when we first started our family.
We made a conscious decision to always live in lower cost of living areas when we were young. We had terrible commutes for a long time but it was worth it to us to not be house poor. (Actually our current home, which we didn’t move to until H was nearly 50, was the first home we were able to purchase in the exact community we wanted and didn’t have to worry about home costs).
We were always very willing to move for better career opportunities for H. We lived all over which has had its own challenges but financially was very worth it for us.
I also recognize that we were very, very lucky that we started off our marriage debt free. Both sets of parents paid for our education so we could just start saving right away. Our trajectory would have been very different if we were worrying about paying off college debt.
We also didn’t have the family we expected so having only one child to put through college also helped the finances a great deal.
We did the above. 529 when kids were young. It wasn’t the full amount. We front loaded our retirement. But also paid out of current income as needed. I am glad those day’s are over. Lol. We cut back as needed but we aren’t extravagant anyway . Both kids had merits so we had some left over 529 that my daughter used for graduate school. Both kid’s worked all 4 year’s. Their choice but we really didn’t have to give them much extra either.
In line with the “every penny counts” mantra, there is a program called Upromise that is now a shopping app that applies a percent to your 529 plan. What is Upromise and is Upromise worth it? -
Back in the day it had a credit card that applied a percent to the 529. I used that back then.