saving for college
Updated September 30, 2021

How to Save for College: 21 Simple Money Hacks

Saving Money

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Saving for college has become even more important because of the rising cost of education. In 2018 Americans held more than $1.5 trillion in student debt, a crippling situation which puts many families in a precarious position. In fact, many parents who are struggling to find ways to pay for their children’s education are still trying to pay off their own student loans.

Good to Know: While you don’t need a college education to be successful, it is mandatory for some jobs. In many workplaces, you simply won’t get in the door if you don’t have a degree. 

How Will You Pay For Your Studies?

Since college isn’t always optional, the question of how to finance it arises.

Did You Know? For 2018-19, a two-year degree is expected to cost an average of $3, 600 per year while a four-year public school degree will cost more than $10,000 annually, on average. A private college degree will cost a whopping $35,830 a year. Remember, these are just averages so depending on the degree and the school, the cost could be a lot more.

That’s why parents are advised to start saving for their child’s education as early as possible.

However, some opt not to save and instead give their children the tools and knowledge they need to put themselves through college.  If you’re reading this you may, therefore, be either a parent or a child who is looking for saving for college tips.

Here are 21 things you can do to help you finance a college education.

1. Set up a 529 College Savings Plan

As with any investment, the earlier you start, the better. If you think your child will go to college, you should consider this option which is specifically for higher education.

Pro Tip: You’ll find at least one 529 plan in all 50 states as well as the District of Columbia and you can open accounts in any state, regardless of where you live. These plans are offered by both states and educational institutions.

  • The funds you invest can be used to fund education at any accredited US school. Anyone can set up a 529 plan and name anyone, including themselves, as the beneficiary.
  • You can withdraw the money tax-free, but it is not tax deductible.
  • There is a limit to how much you can contribute to the fund.

Bonus Tip: Each state sets a lifetime contribution limit and you can’t put in more than is needed to cover the beneficiary’s college costs.  These costs include tuition, lodging, and books.

2. Start a 529 Prepaid Tuition Plan

If you don’t want to take on the risk of investing but you are committed to saving for college, consider a prepaid tuition plan. These plans are only offered by qualified educational institutions.

They allow you to lock in today’s tuition costs for a future course of study. Not every state has 529 prepaid tuition plans, but they are worth considering. If your child decides to go to college out of state, you’ll have to foot the bill for the difference in price.

3. Get a UGMA/UTMA Account

Maybe you like the idea of making an investment in your child’s future, but you don’t want an account that can only be used for education. Consider a Uniform Gifts to Minors Act Account or Uniform Transfers to Minors Act Account.

  • These allow you to transfer assets to children without the need for a special trust. UGMA accounts let you transfer any kind of asset including real estate.
  • UTMA accounts provide for the transfer of securities, insurance policies and bank deposits only.
  • All transfers are irrevocable. When the child reaches the age of majority, the account is transferred to their name.

Pro Tip: Even if the child decides not to go the college, the assets are theirs.

 4. Put Your Coupon Savings into a College Fund

If you do any level of couponing, you know the savings can quickly add up. If you get into extreme couponing, you can hold on to even more cash. Some people even manage to save hundreds of dollars each month. If you’re serious about saving for college, you may want to try this.

Pro Tip: Whether you clip coupons out of the newspaper, get them in an email or use a cashback app, you need to keep track of your savings. Total them at the end of the month and transfer the amount from your bank account into your child’s college fund. This is a much better use of your savings than treating yourself to a gadget or item of clothing. If you haven’t started using coupons or rebate programs, there no better time or reason to get onboard.

5.  Put the Equivalent of Your Kid’s Allowance into a Fund

Even if your child is quite young, they may have started asking you for their own money.

While you may prefer to hold on to as much cash as possible, giving your child an allowance may actually be a better idea. It is never too early to teach them how to manage money and this skill will become even more important as they get older and begin saving for college on their own. However, there’s another reason to give in to their request: it gives you a smart way to add some money to their college fund.

Per Example: If you were thinking about giving them $10 per week, put $5 into their hands and the rest into their college account. This may not seem like much, but it adds up. When used along with other hacks on this list, you can build up a nice sum.

6. Get Your Child Involved in Saving for College

Stashing away half your child’s allowance is fine when they’re young but when they enter high school, they should begin actively participating in saving for tertiary education. Ask them about their dreams and career plans so you can begin looking into the relevant college programs.

Good to Know: Some children know exactly what they want to do but others may change their minds several times during high school. That’s not a problem but you need to let your child know about the family’s ability to pay for their college education. Make sure they know how much college costs.

Be honest about how much you will be willing and able to contribute and how much they will be responsible for.

Action Tip: Give your child some ideas about how they can make extra money so they know you aren’t leaving them to handle this alone.

7. Explore Less Expensive Schools

It’s easier to save for college if it doesn’t cost a fortune in the first place. If your child is already in their teens and you haven’t managed to put away much money, you may want to look at more affordable state schools.

Keep in Mind: Give special consideration to schools in your state which are known to offer a solid education. Use a saving for college calculator to help you compare the cost of different types of colleges.

Bonus Tip: Think about having your child live at home at the start of their college journey to further reduce lodging and meal costs. Alternatively, encourage them to get a couple roommates to cut down on rental expenses.

8. Make the Most of High School

Reducing the number of courses you need to do in college means you can spend less on tuition. If you are a high school student, focus on taking as many Advanced Placement and college prep courses as you can now.

Good to Know: You should also sign up for the College Board’s College-Level Examination Program exams which your preferred schools accept. This allows you to skip some of the basic college classes and even get some credits in advance.

Pro Tip: If you are a parent, encourage your child to take these steps. You can also plan ahead by sending your child to a private high school which puts an emphasis on preparation for college. This would give them a lot more personalized support regarding placement programs and scholarship applications. Investing a bit more in your child’s high school education can actually save you money when the time for college comes.

9. Help Your Children to Find Money

Even if you’ve opted not to pay for your child’s college education, you should still help them to find funding sources. Look for scholarships, essay contests with cash prizes, grants, and other opportunities. Your child may be able to get funding based on their athletic ability, academics, community work or leadership capability.

In addition, based on where you work or go to church, your kid may be eligible for small scholarships which are less competitive than larger, more popular programs.
Bonus Tip: Ensure your child polishes up their writing skills and their online presence to help make them more likely to attract funding.

10. If You’re A Student, Get A Job

There are many creative ideas for saving for college, but it doesn’t get much simpler than getting a job and putting away your earnings. Get a part-time job in a store or restaurant during the school year and pick up extra shifts during long breaks.

Good to Know: Alternatively, let your neighbors know you’re working to put yourself through college and find out if they have any odd jobs they want you to do. You may be able to help with gardening, mowing lawns, babysitting or dog-walking. If you have graphic design or writing skills, you can also find work online.

Pro Tip: The sooner you start working, the more you will make. When you get paid, resist the urge to spend the money on frivolous things. Keep your goals in mind.

12. Pay Bills and Rent on Time 

This is another tip for parents looking to save for college.  You may be wasting money each month by paying utility bills or rent late and attracting heavy fees. Credit card companies are especially heavy-handed with late payments. Pay just one day after the due date and you may face a fee of more than $30. If that fee sends you over your credit limit, you’ll be hit with another fee. Repeat this month after month with multiple bills and you’ll dig yourself into an even deeper hole.
The Bottom Line: Make it a point to pay your bills on time so you have more cash to place in your child’s college fund.

12. Use Cash Windfalls to Top-up the Fund

This tip applies to parents and children alike. If you get a tax refund, a gift of cash or funds from a sale, put the money in the college savings fund.

While it can be exciting to use extra money to splurge on something you’ve always wanted, you have to think about your long-term plans.

13. Set a Weekly or Monthly Savings Goal

You can choose the period and amount which works for your family. In any case, treat contributions o the college fund like a bill and ensure you “pay” on the schedule you have set. Even if you can only afford $10 each week, make sure you deposit it.

Pro Tip: If your income tends to fluctuate, you may prefer to save a certain percentage of whatever you make. Whatever the case, ensure you are consistent in your savings.

14. Get the Entire Family Involved

It’s not only parents who can send children to college. Grandparents, aunts, and uncles can also be asked to contribute. Of course, you may want to ask only those relatives who typically give your child gifts for Christmas, birthdays and other occasions. Instead of books, gadgets or gift cards for department stores, tell them you’re prioritizing saving for school.

Most people will be happy to assist with this goal.

15. Start Saving Early 

Ideally, you should start saving for college from the day your child is born but for many parents, this isn’t realistic. However, if you are planning to become pregnant, you should factor this investment into your plans.

Good to Know: Simply putting aside $100 each month from the time your child is born will give you a principal of $20 000 by the time the time they turn 17. The interest will vary depending on the type of savings account or investment plan you chose.

Take Note

If you start much later, you will need to put aside a larger sum each month or rely on other options for raising the funds.

16. Get a Savings Account for Students

Students who are serious about building up their savings for college need to have a safe place to put their money. A piggy bank or cash jar will only suffice for so long.

Most banks offer accounts specifically targeted to students. There’s usually no monthly maintenance fee or minimum balance requirement. If your child is younger than 18, your name will need to be on the account as well.

17. Get Your Personal Finances in Order First

Parents naturally put their children’s needs before their own. However, you shouldn’t prioritize saving for college at the expense of your own financial needs.

You need to pay off your high-interest debts first and any outstanding student loans. You also need to ensure you have an emergency fund and a plan for retirement.

Good to Know: Your child can work to help put themselves through college, but you may not be able to take on additional work to meet your needs as you get older.

18. Shift Debt Payments to College Savings

Each time you finish paying off a debt, put the equivalent amount in your child’s college fund each month. You’ve already become accustomed to doing without this money so this is a good way to save without having to reduce your spending. If you can’t commit to transferring the entire sum, at least use some of it.

Pro Tip: You can even try to gradually increase the amount you transfer and grow your college savings even further.

19. Attend a Community College

You have the option of doing community college courses while you’re still in high school, so you get some early college credits. This is cheaper than taking the same courses at a public or private college. For even more savings, you can go to community college for a year or two after you leave high school.

Good to Know: You can then complete the degree at the public or private school of your choice. This may not be as exciting as taking off for a college far away immediately after high school, but it is a solid option for getting a much-needed education.

20. Apply for FAFSA

Don’t forget the possibility of getting financial aid. Fill out the Free Application for Federal Student Aid to get access to federal grants, loans, work-study opportunities, and student loans.

Good to Know: Some types of assistance will be provided by the state while others are offered by schools. Apply for aid as soon as possible since many programs operate on a first come, first served basis. Any assistance you get will help to reduce the amount you need to pay out of pocket.

Bonus Tip: You will still need to save as diligently as possible since unexpected expenses tend to pop up.

21. Control Your Spending

Most households can cut their spending. When a college education is on the line, you have to be prepared to make sacrifices. It helps when everyone is on the same page.

You’ll need to eat more meals at home, reduce your energy consumption, and find cheap or free entertainment. You should also try to buy groceries in bulk where possible and repurpose and recycle as many things as you can.

Pro Tip: Examine if there are any services you’re paying too much for like cell phone plans, cable and gym membership. You may be able to find lower cost options which can help free up cash for saving for college.

Are you satisfied with how much you have saved for your children’s college education? What methods are you using?



Logan Allec, CPA

Logan is a practicing CPA and founder of Choice Tax Relief and Money Done Right. After spending nearly a decade in the corporate world helping big businesses save money, he launched his blog with the goal of helping everyday Americans earn, save, and invest more money. Learn more about Logan.

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