By Jørn Earl Otte, Hartford Funds’ Strategic Marketing Consultant, SMART529

January 28, 2021


The idea of saving for college or trade school can be scary, and the options available can seem overwhelming. With so much in the news about the rising cost of college, it can feel like saving for your child’s future is too big a burden to bear. But you don’t have to feel that way. There are ways to save money for your child or grandchild that can be simple, effective, and stress-relieving.

Here are 3 simple and effective things you can do to start saving for your child’s future education.

  1. Make a monthly “everything” budget: When folks are living paycheck-to-paycheck, the idea of saving even a little bit of money seems too daunting. Groceries, car payments, mortgage or rent — there seems to be nothing left over. However, if you take a closer look at your monthly expenses, you may be surprised to learn that you do have some money leftover. Sit down one evening and write down every bill you have for the month. Add up not just the basics like water and electric, but also streaming services, cellphone plans, magazine subscriptions, how many times you ordered dinner-to-go, and even how many bags of chips you bought at the grocery store. Include everything down to the last penny. It may take a little while, but knowing exactly where your money is being spent can be eye-opening. Then, write down your monthly income. Odds are the two figures are pretty close, and likely too close for your comfort. Look at the list of your monthly expenses – Do you need to spend $100/month on fast food? What about those subscription services? And those magazines? Do you actually read them, or do they collect dust? Be honest with yourself, and you will likely find at least a few dollars each month that can be set aside for something more important than binge-watching a 1980s sitcom.
  2. Open a 529 account: No one knows what the future holds. Maybe your child or grandchild will go to college in-state, or maybe they will fly across the country to follow their dreams. Maybe they love working with their hands and will pursue a career in carpentry, or maybe they get excited about the idea of becoming an electrician. Whatever they may do, you can prepare for it financially with a 529 plan. While most people think 529 plans are just for tuition at traditional four-year colleges, they can be used for so much more – Vocational School, Technical School, Apprenticeships, books, supplies, room and board, and more. And you can feel good knowing that, no matter how little or how much you save for them, every dollar that you give them is a dollar they won’t have to borrow from a lender to payback for the next 20 years.
  3. Start small, commit to growth: You will need to check with your own state’s 529 plans to determine what minimums, if any, may exist for opening a plan, and what tax benefits may be available to you. You may also need to seek out the advice of a financial professional to determine which 529 plan is right for you — your own state’s or another’s. Once you know the path that is best for you, open a 529 account with at least the minimum that is required. It could be as little as $5, $25, or in some cases even just $1. Commit to the amount every month. Set up automatic contributions from your checking account or talk to your employer about payroll deductions. After a few months of these minimum contributions, you may begin to realize that you can afford to increase them. If you can, commit to manageable increases every month until you reach the maximum figure you feel you can contribute. No matter how large or small that amount turns out to be, you will have made a tangible, meaningful difference in the lives of your children and grandchildren.

Start with these three simple steps: Budget, Open, Commit. And when your little loved one decides where they want to expand their educational future, you will have helped them to have a financial head start.


About the Author

Jørn Earl Otte is Hartford Funds’ Strategic Marketing Consultant for SMART529 in West Virginia.