By Troy Montigney, Vice President, Ascensus
August 27, 2025
Recently, a financial podcast I enjoy covered the notion of making actual progress in your financial life. Sometimes, what feels like moving forward might actually be you treading water – or worse, falling behind.
The hosts (and this listener) agreed that the time of life when you’re responsible for young children, particularly ones with significant daycare expenses, is universally a time when it’s tough to move forward. If you’ve ever felt or are currently feeling this way, you’re not alone.
Saving for anything, especially education expenses 15-20 years down the road, can feel overwhelming when you’re otherwise rolling off the back of the financial treadmill. With the huge disclaimer that what worked for one person or family might not necessarily work for the next, here’s how we’ve maintained our commitment to saving amidst annual five-figure childcare expenses (I’ve got mild PTSD just writing that):
Start as early as possible
This one is a no-brainer, but for many, it’s easier said than done. We opened 529 plans for our kids as soon as we had their Social Security Numbers in hand. In each case, we didn’t immediately ship our babies off to daycare – thanks to a mix of parental leave and family support, the first months of life didn’t feel like a financial disaster waiting to happen.
Because of this, we budgeted for recurring, automatic contributions to their accounts. Make no mistake, financial stress eventually came; but when it did, our kids’ 529 plans were a sticky part of our financial life. We sacrificed elsewhere to maintain our plan, all because we started early.
Flip “artificial raises” into actual savings
Most daycare centers and preschools, and certainly each one our family has utilized, charge more to take care of younger children. Think of it as a diaper tariff or bottle tax. The idea is infants are harder to care for than toddlers, who are harder to care for than preschoolers, and so on.
The result of this fee structure is a series of what feel like raises along the way. Even when your income doesn’t change, there’s a little more of it unspoken for once your little one moves down the hallway to a new room. Each time one of those moves happens, you can either absorb the money into some other category of spending or put it to work with intention. We chose to repurpose our freed-up daycare money as extra 529 contributions.
Whether you do that, or up your retirement savings rate, or pay down other debt, the point is to not squander the artificial raise. Put it toward whatever moves your financial life forward.
Enlist your village
Whether your village is family-oriented, full of friends near and far, or centered around your physical neighbors, it takes one to get through the early childhood years. And that village will show up time and time again for the countless birthday parties you host for your kids.
Keep in mind nearly every 529 plan offers simple and intuitive gifting experiences for your village. Before you reply to the next “What does Jack / Emma want for their birthday?!” text with a $25 toy or outfit, send a link or code to their 529 plan’s gifting platform. It should be noted this has the added benefit of helping to declutter your home at a time when every object known to Amazon will find its way inside your walls!
Pay monthly instead of weekly
File this under “super specific advice that may not actually apply,” but for us, it made a tremendous difference! The early education center where we spent most of our daycare dollars defaulted to weekly billing. Every time there was a month with five weekly payments instead of four – often conveniently around the holidays, or a birthday, or a family vacation – we felt every bit of it.
It turned out the center could easily switch us to prorated monthly billing and were happy to do so. If you already pay monthly, congratulations – saving is a little easier for you. If you pay weekly, take a closer look at whether paying monthly might help you get ahead.
As we approach the day when both our kids attend the same elementary school, I find myself happy to have daycare expenses nearly in the rearview mirror. (Sentimental dad interlude to say I would still give anything to relive the past six years!) More importantly, I’m proud of the steps we took to keep up with our 529 savings goals along the way. You don’t have to take the same ones we did, but I promise that if you take some, you’ll feel pride in your progress too.
About the author
Troy Montigney is the proud father of 529 Day baby Sophie and her younger sister Molly. By day, he is Vice President of State Retirement Programs at Ascensus. Previously he served on its industry-leading 529 team, which helps over 8 million people save for education via 51 plans serviced across 32 states and the District of Columbia.
Please note: A plan of regular investment cannot assure a profit or protect against a loss in a declining market. This testimonial is not necessarily representative of the experience of other investors and is no guarantee of future performance or success.