March 01, 2022
I've always dreamed of becoming an engineer. I think I'll need to attend a four-year colleg to achieve my goal. When I look at the cost of going to college, I get scared that I won't be able to afford it. Can you provide my family and me with a few simple ways to save for my dream?
Mae (Age 6)
Way to go! It's great to see that you're dreaming big and planning now for college. It's also smart that you are thinking about ways to pay for college at such a young age. You're off to a great start and on the right track! Here are a few suggestions I have on the matter of saving for college:
Start with your savings goal! A savings goal has three parts: what you want to buy, when you want to buy it, and how much it will cost when it's time to buy it. Think about these parts with your college savings goal in mind, and ask yourself:
1. How much do you want to save for college?
This is your goal. Maybe you want to save for four years, maybe just two years. Maybe your goal is to save 50 percent of what it will cost. Keep your goal attainable.
2. How many years before you go to college?
This is how much time you have to save. You will probably be about 18 years old when you start going to college. How many years from now is that?
3. How much will college cost when you want to go?
Warning. This can be the scariest part of planning. It's going to be okay. Check out this great college cost calculator tool with your grown-ups. This will help you see what college might cost in the future so you can set your savings goals and know how much you might need to save each month.
Start Saving! If you don't already have one, you should talk to your grown-ups about opening a 529 college savings plan account. You might have to break it down for them (you know how grown-ups can be). Here's what you can tell them:
Grow your savings! To reach your goal, you'll have to save money. There are so many ways to save! You can save automatically from your bank, your parents can save through their paychecks, you can ask your grown-ups and friends to add money to your college savings account instead of buying you toys for birthdays and other holidays, just to name a few. I like to say that every dollar saved is two dollars you won't have to borrow and pay back later, so save as much as you can early and often!
Mae, you're off to a great start. Whatever you decide to do, the most important thing is to keep saving, keep dreaming big, and keep working toward your education goals!
Love from Alaska,
This material has been prepared for general and educational purposes only. This material does not provide investment, financial, legal, or tax advice. Please consult your tax or financial professional for details regarding your specific situation.