It’s amazing how fast a child grows. Before you know it, they’re off to college — the most expensive time of their lives. If saving money for college is high on your priority list for your children, check out this selection of ways to start setting money aside. The earlier you start, the more you’ll be able to afford when your child is ready to start off on their next grand adventure.


Saving for college is one of the most daunting tasks a parent can take on, but there are a few creative savings vehicles to take advantage of. While putting money aside out of every paycheck will certainly add up over the years, what you do with that money and where you get that money can mean the difference of thousands of dollars by the time your little one is picking out posters for their dorm room. Instead of depending on a sports scholarship or winning the lottery, check out these lesser known ways to save for your child’s college tuition.

1. Giving a Gift for the Future

How often do you really stop and think, “Wow, my child could really use a few more toys?” When his or her birthday rolls around again, ask for birthday money instead of another stuffed animal or the latest fad being promoted during every commercial break. Putting that money into a high yield checking account or a money market account will allow it to grow.

Asking for birthday money on your child’s behalf may not make you very popular when he or she gets older and understands the concept of a birthday party. But in the first few years of their life, they won’t even notice if they don’t get a mountain of presents.

While it may be rude to ask acquaintances for money, it is certainly a conversation you can have with close friends and family who are invested in the future of your child. Miss Manners would advise against putting it into words on a birthday party invite though. Save the suggestion for those who ask outright what to get as a present.

2. Spend to Save

Everyone is familiar with the concept of credit card reward programs. People use them to earn miles for travel, gas cards, and much more. However, did you know that many credit cards have reward programs that allow you to put the money directly into a savings account specifically for college? Certain credit card companies allow you to request your rewards in the form of a check, which can certainly be put towards your child’s tuition, but there are programs that you can opt into that increase the dollar amount if the money is put directly into trusts set up for college.

Because these programs are less commonly utilized, they are often only depicted in the fine print of a rewards program that no one actually reads. It is worth it to make a phone call to customer service to ask what sort of options they offer. You may be surprised by how easy it is to get the ball rolling on your child’s tuition.

Just make sure that if you opt for this route that you do so responsibly. Do not spend more than you would otherwise just to get the rewards. Instead, make all of your purchases with the credit card that offers the best rewards knowing that you will be paying off the balance each month. You should never let the debt on your credit card exceed more than 20% after a payment. According to FICO, the best credit scores maintain a debt of less than 7% on their cards.

3. Money for Nothing – Invite Your Friends!

Maybe you don’t have a credit card that can boost your savings for college. That’s OK. There is no need to go opening up new credit cards. The last thing you want to do is put your family in debt in order to have some extra money later on. Instead, check out third party programs that allow not just you to save money, but your friends and family as well.

One such program called Upromise allows you to link an existing credit or debit card to trusts, a savings account, or even to pay down an existing student loan. Depending on the purchase, 1% to 25% is put towards tuition and into your specified plan. Friends and family can also sign up without having to provide you with their personal information. Every time they swipe, your child will be earning money towards college.

There are other similar programs that offer the same type of savings. Many of these programs are local, either to a metropolitan area or a state, in an effort to encourage financial responsibility and education in the region. Check to see what sort of options are available in your region.

4. 529 Plans – A Best Kept Secret

One of the best ways to save for college is also one of the least utilized options, partially because people don’t take the time to talk to a financial professional as they consider savings vehicles. Check out the 529 Plan. A 529 Plan is a savings plan specifically for education. It is operated by either the state or an educational institution to help families set aside funds for future college costs. The intimidating name comes from the Internal Revenue Code that created this type of plan back in 1996.

There are many benefits of opening this type of account. Here are just a few:

  • The tax breaks are unmatched. The money that you put into the account will not have taxes taken out of it, meaning that if you deposit directly from your paycheck, you will be getting more bang for your buck than if you made a deposit out of your checking account each week.
  • You remain in control of the account at all times. Other programs can be beneficial, but they don’t allow you to touch it or manipulate it until the child turns 18. You have the option to withdraw the funds, with a small penalty, for a reason other than college if your family experiences some sort of hardship.
  • They are low maintenance. By enrolling in the program and setting up a payment system, you can free your mind of the worry of saving for college because it will automatically be done for you.
  • 529 Plans are easy to report on taxes. You will get a statement in the mail before you do your taxes and simply add some numbers to a line. No need to hire a tax consultant to figure out what to do with this new, strange account.
  • They are very flexible. You can change anything at nearly any time. You can alter the amount, the beneficiary, and more as you deem necessary.
  • Everyone qualifies. No matter your financial status as the parents or the qualifications of the child when he or she turns 18, you can still utilize all the benefits of the 529 Plan, unlike other plans that require you be below a certain income ranking.

This is a way to save the second your child has a social security number. The entire process can be done online without having to speak to a live person. So when you are up at 3am with your baby worrying about his or her future, hop online to alleviate your fears with just a few clicks and a few bucks to start out.

5. Trust Funds Aren’t a Stereotype

What do you imagine when you hear about trust funds? Many people automatically conjure up images of extravagantly rich families who want to protect their assets by ensuring they end up in the appropriate hands at the appropriate time. But the fact of the matter is that trusts are far more universal than TV and movies would have them appear.

If you have even a small savings of a few thousand or assets of another kind (stocks, real estate, other property), you can put it into a trust fund. You do so by meeting with an attorney to determine the beneficiary and the stipulations. The stipulations can be that your child receives the money only when they turn 18 and can only use the money on their education. This process is irreversible since you are essentially handing the money to the trustee, the attorney who helped you set up the program.

Saving for college is certainly an important aspect of being a parent. Every little bit you save or earn sets your child up for success no matter what they choose to do in the future. With these lesser-known ways of savings, you can secure a positive future without having to sacrifice much in the present. Review your options and consider the benefits of talking with a professional who might be able to steer you in the right direction for your unique situation.