Educational finances – putting money aside for your children’s education

In another article a few months ago, we talked about the higher education studies and mentioned some of the top-notch institutions in Orlando and surroundings. That non-extensive list of 13 colleges, institutes or universities in different fields, is part of a large group of about 100 public or private institutions in the state of Florida. Today, we are going to discuss another matter related to education — the financial side of it.


It is true that having higher education doesn’t ensure success and happiness in life. Yet, nobody can deny that more educated people have more opportunities in life; it seems that more doors get opened to those folks than to the ones that stop studying sooner.


None the less it is fact that going to a first-class college or university may be expensive and it can become a financial burden for the individual and even his/her family. Some say that a college education often is the third biggest financial goal for a family, only behind buying a house and retirement. As for almost everything in life, if we plan in advance and start to put some money aside for our children’s education since they are in their diapers, something that we thought to be impossible will actually be at our fingertips.


One may say … Ok, I’m convinced. When should I start? Here are two things I learned:


1) it’s never too soon – one of my closest friends that has 2 daughters (ages 5 and 3) recently told me that he already opened 2 savings accounts to pay for their higher studies, the first one 5 years ago, the second one 3 years ago. That’s right … the babies were just months old when he started to put money aside;


2) the sooner the better – if you start to save $200 per month when your child is months old, when the time to go to the university comes the educational fund will have $45k+, not considering any financial gain you might have on this money. On the other hand, if you leave this to the very last year, maybe saving $4,000 per month is NOT an option for you.


How much money should I save for my children’s education? This is a very tough question to answer as it depends on so many things such as where your child will choose to study, what field of studies he/she will follow, etc. A part the obvious costs as tuition, the several different fees that the institutions typically charge as athletic fee, technology, health, extra activities, there are other expenses like books and material, housing, food, transportation and so on.


The site of the University of Central Florida (UCF), in its Student Account Service section, shows a spreadsheet that allows you to have an idea of the tuition and fees that currently apply on that institution, according to the level of the program and the number of credits that the student will enroll. Check this link at Other universities and colleges will most likely have similar apps that could be a give a ballpark figure of these costs.


To maximize the money you are saving for your child’s future, encourage him/her to get good grades. Good grades can be more important than most people think. They can subsidize your child’s education. Get them involved as it can’t just be up to the parents to cover the whole cost of post-secondary education. From the age of 15 or 16, he/she could work in a part-time job, earn money and put some of it toward education savings.


It is important to say that some institutions offer scholarships, what could be a very good thing for your family. Good grades can enable a student to pay for much of his/her education with scholarships. Encouraging your child to pursue scholarships can save you a lot of money. It is an especially good strategy if you are not able to save very much for your child’s education.


Some people think that only the most exceptionally talented students can get scholarships. This idea is completely false. There are several types of scholarships as academic and merit, athletic, disability, minority, vocational, just to mention some of them. Also, some governments give tax incentives, tax breaks or offer loans under better conditions in order to help future students and their families to achieve this dream. Many of these scholarships have specific criteria that make sure that normal kids and teenagers get the money. In many communities, scholarship money is awarded to deserving high school students by various organizations, business, individuals, and governments. In addition to this, numerous scholarships are also available for college and university students. It is sad to note that only a small number of students take the time to apply for many of these scholarships. Many scholarships are much easier to win than most people think. They are a terrific way to fund an education and save you money.


Of course, all these scholarships and incentives depend on which country you are and which state you live. For example, in the United States, there is the Coverdell education savings account or simply Education Savings account (ESA) that is a tax-advantaged investment account designed to encourage savings to cover future education expenses such as tuition, books, etc. in distinct levels of studies. You may want to learn more about this option and about the 529 plans, which is another way to put money aside for your child’s education. You can start by checking these links:




Something that is very important to have in mind is to verify what happens if, after saving money for higher education, your child decides that college is not for him/her. Depending on the option you chose to save the funds you can keep them as a savings plan for another use, transfer these funds to another family member or even withdraw the money (some penalties may apply in this case).


Whatever you decide to do, do save money for your child’s education. And from the age of 6-8 years old, when they start to have a better comprehension on money limits, plans and future, get him/her involved in the conversation about school and saving money for it.


This article is for general, indicative purpose only and should not be considered investment advice. Florida Connexion is not liable for any financial loss, damage, expense or costs arising from your investment decisions based on this article.


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