Saving Early Gives You a Head Start On Handling the Financial Part of College
- On the Money Magazine
- Jul 28
- 2 min read
Estrella Hernandez, Illinois Institute of Technology, Freshman, Summer 2024
Starting college is exciting since it is a new beginning, but figuring out the financial part of it is not so thrilling. Many students might choose to save at the beginning of high school, but they most likely will not have as much saved up as they would like. An easy fix for this is to start saving earlier. If kids start to save at a younger age, time will be on their side and they will not be in the same position as students who start saving in high school.
One way that kids can start saving money is by doing simple paid tasks. The earlier they begin to save the better. This Vanguard article says it best: “The earlier you save, the more time your money has to grow. This is the magic of compounding — when your returns earn more returns and so on.” (Vanguard, 2022). An easy way this can be done is by creating a 529 Plan (Illinois offers a BrightStart 529 Plan). Dennis Acosta, a teacher at Roberto Clemente Community Academy, spoke about how he handled the financial part of college. “I felt remorse towards those adults in my life when I was getting introduced to college (who) didn't encourage me to save up money.” Now there are 529 college savings plans, which are savings accounts for educational expenses that parents can start for their kids. For example, a parent starting a 529 account for their 7-year-old, constantly adding in $10 each month until their child is 18 years old, can end up with $2,007 (or more) in that account. Ideally, parents should fund these accounts when the child is between the ages of 0-3 in order to reap the highest return (Collegefinanciallady, 2020).
Zoe Sarpy, an incoming freshman at NIU (Class of 2028), commented that her parents had a college account for her that only had $500. Zoe, who is worried about the financial aspect of college, wishes she had deposited more money more frequently. “My parents give me an allowance and instead of spending it on shopping, I (should) have saved it up in that account to be less tempted to spend it.” Kids need to remember that even though a parent can open a 529 account, they aren’t the only ones who can deposit money into it. If teens can recognize that the responsibility to save for college belongs to both them AND their parents, not only will their account balance increase, but they will also gain a sense of responsibility.
Sources:
Interviews:
Zoe - Upcoming Freshman In Northern Illinois University
Dennis Acosta - Teacher In Roberto Clemente High School
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