Jan 112017
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If the thought of being able to put money into savings makes you laugh hysterically, clap your hands.

If you clapped, you’re not alone. It can be incredibly difficult to put money into savings. And that’s just when the savings are your own. When you start considering how you’ll manage to save any money for your kid’s future — well, that can seem even more impossible.

If you want to save money for your kid’s future, or at least want to try, here are a few tactics to consider:

Start a 529 Plan

Like a 401k, a 529 plan is helpful, but it can be daunting if you’re new to it. The IRS has a detailed and helpful Q&A page that makes for a great introduction to this popular college savings plan.

The short and sweet explanation is this: A 529 plan allows you to save money specifically for education costs without being taxed on the account’s earnings — provided you spend those earnings on approved education costs. It’s considered your asset, so it won’t affect your kid’s financial aid and you can transfer it to their sibling if they’re not interested in pursuing higher education.

Earn Rewards

Be savings savvy when you choose your credit cards. Provided you’re not spending beyond your means and you’re paying off your monthly balance in full, credit cards with cash back rewards are a great way to save.

One way to save while sticking to your budget is to choose cards that give cash back perks for major budget items like gas or groceries. Remember, if you have to spend money on things you wouldn’t normally buy to get rewards, you’re not really saving anything.

Buy Bonds

The upside is treasury bonds are an incredibly safe investment. The downside is that same safety means they likely won’t increase in value as much as other investments.

Although interest rates on treasury bonds are unlikely to match skyrocketing tuition costs — or even rising car costs — they can still act as a safe little emergency fund. When every little bit helps, a few treasury bonds certainly don’t hurt.

Buy Life Insurance

There’s nothing like talking about death to really spice up college savings tips.

But to be serious, death might not be anyone’s favorite subject, but failing to consider your untimely demise is a surefire way to derail your kids’ financial future.

Although you hope it’s never needed, your life insurance can help cover mortgage, car or debt payments in the event of your death. Ideally your life insurance will cover your debts and funeral costs, allowing your kids to grieve without the added weight of your unpaid debts hanging over them.

Start a Savings Account

Opening a bank account in your kid’s name isn’t going to yield astronomical growth, but it’s a sure and steady way to put aside some savings.

Just keep in mind that once your kid turns 18 or 21 — depending on the state — and gets control of the account, you will no longer have control over how they spend it.

Teach Kids How to Save

Whether or not you’re going the savings account route, it’s incredibly important to teach your kids about money management.

Teaching your kids the importance of saving and how to contribute to their savings can start at a young age. Teach them how to put part of their allowance in savings. When they’re old enough to take on their first job — raking leaves, babysitting, mowing lawns, pet sitting — teach them to put a percentage of that money in savings too. Keep building on lessons of putting money in savings, delaying gratification and saving up for big wish items as they graduate to their first part-time or summer job.

Get the Family Involved

Have well-meaning grandparents/aunts/uncles/third cousins who overload your kid with toys every birthday and Christmas? While your kid may see no problem with that, an overabundance of stuff might: a) not fit in your home, b) not fit with your parenting views or c) seem like a waste given how quickly your kid outgrows or loses interest in said stuff.

It’s always awkward to have money talks with family, but consider asking these generous relatives to diversify their generosity. Let them know that a few physical gifts are appreciated but that contributions to Junior’s 529 or savings account would be a long-term way to show their love and support.

Sell Your Car

Stop. Breathe. This doesn’t mean you have to sell your car and put that money into your kid’s 529 or savings account. Of course, if you’re already planning to sell your car and embrace the bicycling life, more power to you.

But what more parents might be able to consider is this: Make your old car your kid’s first car.

If you’re savvy about buying vehicles that will last more than a few years before becoming a black hole of repair payments, consider selling your used car to your kid. With good planning, you can have this overlap with the time you would typically upgrade to a new vehicle anyway.

The average price of a used car rose by over $10,000 in the past 10 years. By selling your old car to your kid, you can ensure they’re receiving a quality vehicle and you can likely offer a far more competitive price. From there, it’s up to you what you do with your generously low purchase price. You can put it towards a new family car or sneak it into your kid’s 529.

Make Savvy, Personal Choices

It’s hard to keep up with the Joneses when the Joneses are buying each of their 2.5 kids new top-of-the-line cars, paying for four years at a competitive private college and contributing a down payment for a house.

With competition like that, it’s no wonder well-meaning parents are stressing about how to provide for their kids’ future.

Although it’s hard to ignore cultural pressure, remember this: You’re not a bad parent if you don’t match the proverbial Joneses. Putting off buying your own car or house or neglecting your own savings or financial responsibilities won’t do your kids any favors.

It’s important to be honest with yourself and your kids. Be honest about what you can and can’t afford. And, more importantly, be honest about what your kids truly want or need.

As you kids grow and mature, help them figure out if a four-year college is right for them. Would they prefer to live at home and commute to a trade school? Would they prefer to get gen ed credits out of the way at community college before transferring to a bigger institution? Are they interested in joining the armed forces? Or would they be interested in a career that involves training via apprenticeship rather than classroom studies?

While it’s important to start saving early, it’s also important to keep your unique situation and unique child in mind as the years pass. Adjust your savings plans to fit their needs and your financial realities. Keep teens involved in talks about planning and saving for their future.

In the end, teaching your kids about money is really one of the best investments you can make in their financial future. You can engage in as many savvy savings plans as you want. You can pay every last penny for their college and first car. But if you haven’t taught them how to be savvy with their own money, all that careful planning won’t amount to much saving in the end.




Jennifer Landis is a mom, wife, freelance writer, and blogger. She enjoys long naps on the couch, sneaking spoonfuls of peanut butter when her kid’s not looking, and the occasional glass of red with her husband in her yoga pants. She is the mastermind behind Mindfulness Mama. Find her on Twitter @JenniferELandis.

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  92 Responses to “How to Save Money for Your Kid’s Future — or at Least How to Try”

  1. Thank You for the information, I don’t have kids yet but the article is really interesting because I am new in the US, I will continue reading your articles in the future to learn more stuff like this..

  2. Hey Robin, thank you for sharing these tips. I am not a father, but I believe teaching kids about personal finance is really crucial these days, especially it’s an area where most schools around the world ignore.

    Udemy has some pretty good personal finance courses. Parents can take them and decide which part of these courses are relevant to their kids. 🙂

  3. Great points. We don’t have the 529 plans but we have custodial savings for each child that the grandparents contribute to.

  4. The more tips the better when it comes to saving for your kids. It used to be so much easier in the olden days but we do have more options and plans available to us; thankfully.

  5. This is great! We have one in college and one we are saving for!

  6. Very useful tips! I am sure I will have to look closer into it when I decide that it’s time for a little one. Thank you for visiting me on http://www.igaberry.com Best Wishes and a Happy New Year, Iga x

  7. Being wise with your money is a good thing for all around healthy family finances. We are fortunate that both kids decided on military service and thus their college educations are paid for by their blood, sweat and tears.

  8. Great post, very useful and insightful. Will be using some of these ideas, thanks.

  9. These are all great tips. I’m totally bookmarking this. I have three kids who will all be going to college in a few years, and anything I can do now to lessen that blow is great.

  10. Thank you SO MUCH for sharing this. My daughter is only 6, but I’m already cringing at what college could cost when she heads off for higher learning. Bookmarking.

  11. Although I’m not a parent, but I believe these tips apply as well for an adult who plans some things in the future. Life insurance is crucial as you said, it takes the burden from the loved one’s shoulder. Very informative and insightful tips!

  12. This is a great post with strong, useful advice. I like the idea of having relatives contribute to your child’s 529 in lieu of (or in addition to) gifts for birthdays and holidays.

  13. Start saving as soon or even before your children are born. Our grandchildren receive money from us every birthday and christmas. It goes straight into their savings. They receive plenty of toys and we usually end up buying them something else anyway. The oldest is 5 years old and already has almost 5,000 dollars in his savings.

  14. These are great tips! I literally nickle and dime…i save ALL change and put it in an account they won’t be allowed to touch until they are 18…You’d be surprised how much you can actually save that way!

    • That sounds like a great way to save extra money for the kids! I need to do something like this.

  15. These are great tips, we have already started saving for our grand kids college!!

  16. These are great tips!! I don’t have any kiddos yet, but I remember bonds I was given from my grandparents that I was able to use right after getting out of college and they were such a blessing!

  17. I think getting an early start to a savings account is a fantastic idea. It’s easiest to save for college in little intervals.

  18. We started a savings account when our son was young. It’s slowly accumulating, and I hope, as they years go by, we’re able to put more into it.

  19. These are all great ways to save for your kids future. It is important to think about these things well in advance. We had bonds and a 529 plan for both of ours.

  20. This is a great overview of saving money for the future. College is so expensive these days, so it’s important to find ways to put money aside each year.

  21. getting ourselves on a budget and taking care of ourselves financially is such a huge thing to be able to get saved up for our kids. we have started a 529 plan and opened up savings accounts in our kids names that we, and family, contribute to each month. we need to get a life insurance plan too!

  22. Thanks for the tips! I started a 529 when my son was born. Great idea!

  23. I definitely need to open a savings account but all my money seems to disappear straight away! I have terrible spending habits.

  24. Great tips! So many people think- there is no way that I can save money for an emergency fund, let alone save for the kids. It is possible. Sharing this 🙂

  25. My kids are a little bit older, so I encourage them to save for their own future too. Pretty hard in our instant gratification society!

  26. This is such an important post, especially nowadays when scholarships are smaller and tuition fees higher. Great idea on involving the family, saving in other ways, and starting various savings plans! xx Adaleta Avdic

  27. I agree with all the points. Its important that they know the value of money.

  28. These are all great ideas. We have a 401k plan, but I have never heard of a 529 plan. I might have to look into this a bit more.

  29. This is great info for someone looking to start saving. We have/do most of these- college is expensive!!!!

  30. I think teaching kids how to save is so important! Start now and they won’t be clueless young adults!

  31. These are all great ideas. We don’t have kids yet, but with a husband in med school, finances are what we think about often. Thanks for sharing!

  32. I really need to start doing this! I’ll keep these tips in mind.

  33. So many people need to read this. Its crazy how bad people are with money!

  34. My dad had bonds for me, but when I cashed them in for college they weren’t worth too much more than the face value.

  35. I still can’t believe my son will be off to college in another year. The time went way too fast.

  36. These are all great suggestions! Each of our three children have had savings accounts since they were born and we have continued to add to them over the years.

  37. This is a great list! It’s never too early to start saving! 🙂 I love your tips!

  38. These are such great ideas! Both of my kids have savings account and we really make it a point to add to it whenever we can.

  39. This is so important for parents to teach their kids. I wish I would have done this with my kids sooner.

  40. I just had a baby 10 months ago and this was SUCH a fantastic post for me, and helpful for all families. Even working on a couple of these will make a big difference for a kid’s future.

  41. What awesome suggestions!!!! I’m pretty good at saving for things but this is definitely one inneed to get better at!!! College is a fortune these days!

  42. These are really great tips. With the prices of everything (especially university) increasing so rapidly, it’s so important to me that I give my kids a good headstart.

  43. There are so many awesome ideas in this post. Thank you for the motivation.

  44. These are all valid ideas. I need to consider a lot of these because it would be so beneficial to me.

  45. Nice list of ideas. All of my boys have savings accounts and we encourage them to put at least some of their gift money into it for the future.

  46. This is all such great advice. It can be hard to put away money but when the effort is there you never know what can be achieved. The plans where you earn side money and put that into an account is a great idea.

  47. I opened a savings account for my kids when they were born. I have been putting a little bit in every pay check. It will be nice for them to be able to pay for school.

  48. These are great ways to save money for your kids future. I will have to open savings accounts for the kids to save for school.

  49. These are all such great tips. Both of my girls are saving up money already. Once they were born we made them bank accounts. We usually give them some change so they can start saving up.

  50. these are such great ideas, so insightful and relevant. I think our kids need more of this! I wish I had more saving tips and understanding when I was growning up.

  51. These are really great tips. I have quite a few kids to save for so starting early was a must. We have bank accounts for all of our kids since birth, but I’d like to do more!

  52. With constant economy changes and college expensive saving for your children’s future is a must. Luckily i dont have kids now but still preparing for the future

  53. This post has such great information. I really wish my parents knew about all these ways to prepare for a child’s college education. I feel like they could have utilized some of these options, so I could at least be going into college with some savings. Hopefully, this helps someone else!

  54. I have 4 years old son and I found this post very helpful with a lot useful tips. We have opened saving account on his name a few years ago thought.

  55. These are great tips! We are just starting our family so perfect timing. Pinning!

  56. Thanks for this. so note to my true love and I
    1. Start a Plan
    2. Buy bonds
    3. Start a savings account.

  57. These are all really great tips and I especially recommend the one having family spend a bit less on presents and contribute some of that money instead to the child’s education account. I also think you should start as early as possible, no matter how little you can afford to put away at the time. My four are now grown, but I remember how very difficult it was to be able to save for their education.

  58. These are really great tips! Savings for kids are really important. Will try your suggestions here.

  59. Wow, sound advice and great avenues to save money for our kid’s future. Never knew so many options existed!

  60. Saving for the kid’s college is certainly a daunting task. These are great tips and ideas, thanks!

  61. This is my goal for 2017. Would love to try your tips here. Hopefully I can reach my goal for my kids.

  62. This year I started to teach my son to save his money and he is really happy with that.

  63. We just opened a savings account for our oldest. I wish we had done it along time ago and put in all the birthday and holiday money she has been receiving!

  64. Smart choices are listed here.
    I like the list, especially starting a 529.

  65. These are great savings tips! I am pinning!

  66. These are really great tips! My 8 year old has his first bank account and he’s very excited about it. Agreed to teach children to save from young is important. As for parents, we’re also saving on RESP (registered education savings plan) for him when he goes to college.

  67. These are all great tips for saving money for the kids future. We opened a savings account for our boys when they were born and they grandparents bought them savings bonds. It is so important I believe for parents to think of their children’s future when the the kids are young. Thanks for sharing the tips.

  68. These are all great ideas. I am going to show this one to my husband. WE need to start saving now!

  69. I love all these tips and am definitely going to sell my car- err give it to my daughter when she gets her license! Good stuff- great financial reminders

  70. love all these great ideas. saving money is so important for the future

  71. We started saving for our children’s education when they were young. We have RESP’s (Registered Educational Savings Plan) and our government also contributes a percentage towards them annually as well.

  72. Love this, such a smart post! Especially if you have little ones with special needs that you need to save for – so many great tips!

  73. Great ideas on how to save for your kid’s future. Hopefully all the parents follow suit.

  74. We don’t have littles but we save for our own future diligently! We employ many of the tactics you advise and live by Dave Ramsey. Good luck!

  75. Very god tips. Personaly i dont think you need a car, especially if you live in a town with good public transport.

  76. Teaching children about saving money is so so so important! These are all great tips on doing so!

  77. This is something I have been thinking a lot about lately. Thank you for the awesome tips!

  78. These are such good tips! I really need to think about this more, but it can be hard to stay focused! Thanks for the awesome advice and reminder.

  79. Great info! The one tip I’d give is whatever option you choose START EARLY! Plus save for your own retirement too. Stop buying stuff, start living experiences and saving for the future.

  80. These are really helpful tips! I have three kids and we started a savings account when they were born, we put $7 in a week in there. Now that they are 8,7 and 5 they each have a good amount in there. We plan to teach them about this as well and hope to encourage them to save, they can add to the savings too!

  81. These are really great tips. I had no idea about the IRS Q & A page! I’m looking forward to researching some of these options.

  82. We are very lucky, we have a 529 for all of our kids. It is such a relief to know that their college education is covered. These are such great tips, and it is never too early to think about it.

  83. Some great tips here and with 6 kids I really nearly to start planning more ways to save more

  84. Teaching kids how to save is so important. I don’t feel like enough parents are open to talking about money with their kids.

  85. One of the things that I’m so grateful for as an adult is that my parents taught me about finances at a young age. It’s so smart to begin fostering a healthy financial future for your children while, at the same time, teaching them how to be smart with their own money. Great post.

  86. Lots of great tips. thanks! I have 3 kids so I definitely need to start saving now. I plan to have 529 plans so they can be prepared for those outrageous college costs!

  87. We need to buy life insurance. It’s something we’ve been talking about for years but we’ve never done.

  88. These are such great tips! We started saving for them when they were born. Little by little. But, these are great ideas to start. It’s never too late.

  89. There are plenty of options to save money, you just have to find the right one that works well for you. I thino these are helpful suggestions.

  90. I remember when 529s started. My parents used them for my sister and me to save on college. Now my siblings use them to save for their kids’ colleges. I think the best advice is to start saving as early as possible since college expenses go up every year.

  91. I really love this list and so glad that you share this with us