Finance 101: How to Start Saving Money for College

© International Foundation for World Freedom

Hsuan Ching Chen,

MS Business Analytics

January 13, 2025

Saving for college might feel like a daunting task, but with a little planning and discipline, it’s entirely  manageable. Whether you’re saving for yourself, your child, or a loved one, starting early and staying  consistent can make a big difference. 

Key Steps to Start Saving 

1. Set a Clear Goal 

Determine how much you want to save. Research tuition costs for colleges of interest and  consider other expenses like housing, food, and supplies. Having a target amount will help you  create a realistic plan. 

2. Open a Dedicated Savings Account 

Use a 529 College Savings Plan, a tax-advantaged account designed specifically for education  expenses. Alternatively, consider a high-yield savings account to grow your funds faster. 

3. Start Small but Consistent 

You don’t need to save a lot all at once. Start with whatever you can afford—$25 or $50 a  month—and increase the amount when possible. Consistency is more important than size. 

4. Automate Your Savings 

Set up automatic transfers to your savings account. This ensures you’re saving regularly without  having to think about it, making it easier to stay on track. 

5. Take Advantage of Employer Benefits 

Some employers offer education savings assistance or matching contributions for 529 plans.  Check if your workplace provides these benefits and take full advantage of them. To learn more  about 529 plans and how they work, visit SEC: An Introduction to 529 Plans. 

Smart Saving Tips 

• Look for Scholarships and Grants: Encourage applying for free financial aid options to reduce  out-of-pocket expenses. 

• Cut Back on Non-Essentials: Redirect money from dining out, subscriptions, or other non essentials into your college fund. 

• Use Windfalls Wisely: Tax refunds, bonuses, or gifts can give your savings a significant boost. 

Start Saving Today 

Saving for college doesn’t have to be overwhelming. By taking small steps, staying disciplined, and  using the right tools, you can build a fund that helps make education dreams a reality. Every dollar  saved is a dollar that doesn’t have to be borrowed—your future self will thank you!