How to Pay for College Without Breaking the Bank
College is one of the biggest financial investments a family makes. Paying for tuition, housing, books, and daily expenses can feel overwhelming. Some parents cover the full cost. Others ask their child to share the responsibility. Many families fall somewhere in between.
The good news is this: with the right savings plan, college does not have to ruin your finances or your retirement goals.
Why a College Savings Plan Matters
Without planning, families often rely too much on student loans. This can leave students paying debt for decades. A savings plan helps reduce loans and keeps long-term costs under control.
Starting early makes a big difference. Even small monthly contributions can grow over time.
A Three-Part College Savings Strategy
Many experts recommend dividing college savings into three simple parts.
Part 1: Savings Account (Past Income)
This part focuses on money you save over time. Ideally, parents should start saving when their child is born.
For example:
About $220 per month can help cover public college costs
Around $417 per month may be needed for private colleges
Saving early reduces stress later.
Part 2: Current Income During College
The second part uses income earned while your child attends college. This includes:
A portion of the parents’ income
Financial aid
Scholarships
Student earnings
These funds help cover tuition, housing, and daily expenses.
Part 3: Student Loans (If Needed)
Loans should be the last option, not the first. When families save consistently, students usually need smaller loans.
Many student loans offer:
Lower interest rates
Flexible repayment options
Borrow only what is truly necessary.
Teaching Children Financial Responsibility
Another approach gives students more responsibility. Financial advisor and mom Laura Kuntz used this method with her daughter. She offered a fixed amount of support and expected her daughter to manage the rest.
Kuntz explains that when students pay part of the cost, they take college more seriously. They understand the value of money and education.
The Most Important Lesson
There is no perfect savings plan. What matters most is having a plan at all.
Teaching children about saving, budgeting, and responsibility prepares them for real life. College costs may be high, but smart planning makes them manageable.
A little preparation today can protect both your child’s future and your financial peace of mind.
Source:
https://www.fastweb.com/student-news/articles/2367-combat-high-college-costs-with-a-savings-plan?g=1&page=2&utm_content=fw_C1_20100622_&utm_source=nlet
