By Tim Gorrell, Executive Director, Ohio Tuition Trust Authority

December 7, 2021

The first few years of parenthood go by in a flash. As you settle in with your family, take some time to figure out how you’d like to support your child’s future higher education. It’s best to start saving as early as possible. However, it can be overwhelming to find funds to set aside now for your young child’s future college costs. Here are some ideas on how to build a financial down payment for your baby’s future.

Open a 529 account before their birth 

Did you know that you can establish a 529 college savings plan for your child before they’re even born? It’s simple. Every 529 account has an account owner, usually a parent, and the beneficiary, usually the child. To be named as the beneficiary, your child must have a Social Security number. To contribute to your child’s future college plans before they even arrive, you can open a 529 plan and name yourself as the owner and beneficiary. Once you have your baby’s Social Security number, you can easily change the beneficiary to your newborn.

Baby showers: Ask for the gift of college

There will be many showers to celebrate the impending arrival for your baby. There are also many items you will need for your child. However, why not ask for the gift of college at these celebrations? Loved ones want to give presents that have significance and what gift can last longer than a college education or technical training? A 529 gift contribution lasts a lifetime.

Ask others for 529 contributions

Family and friends will want to give meaningful gifts for this and other important milestones in your child’s life. You can invite them to contribute to your child’s 529 college savings account instead of giving traditional gifts for graduations, birthdays, holidays, achievements, and other special occasions.

Necessary nesting needs for your newborn

Car seats. Diapers. Cribs. Diapers. Baby bouncers. Diapers. Baby clothes. Diapers. Bottles. Diapers. Baby shampoo. Diapers. Oh so many diapers. The list goes on and on. When you are starting to buy all the needed items for your baby, shop with a free loyalty program like Upromise, which offers its members cash back for their purchases from a wide variety of businesses. By linking your Upromise account to your 529 college savings plan, you can roll over these rebates to build up your 529 account balance.

Disappearing expenses become 529 contributions

Once your child no longer needs diapers, you can add the dollars saved from that expense into your child’s 529 account. Disappearing expenses are those costs that are in your budget for a limited time span. Once you no longer need the disappearing expense, you can turn those dollars into regular contributions to your 529 account.

Compound interest

One of the reasons to start a 529 college savings fund as early as possible is to take full advantage of the power of compound interest. Compound interest is interest gained on contributions, earnings, and interest already accumulated in the 529 account. It’s one of the most dynamic tools to grow a 529 plan. The longer a college savings plan has time to develop, the longer compound interest can add the 529 account. Also, one of the tax benefits of investing in a 529 plan is tax-free earnings so every dollar of investment growth is yours to use, tax-free. Use this calculator from U.S. Securities and Exchange Commission to see how compound interest can build up your college savings account.

To learn more about tax-free 529 college savings plans, including what programs are available in your state, visit

About the author:

Tim Gorrell is the executive director of Ohio Tuition Trust Authority. For over 30 years, Ohio Tuition Trust Authority has sponsored and administered Ohio’s 529 College Savings Program, CollegeAdvantage. Ohio’s 529 Plan oversees more than 670,000 accounts and over $15.93 billion in assets as of Sept. 30, 2021. Visit or call 1-800-AFFORD-IT (233-6734) for more information.