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As parents, grandparents, aunts, uncles or guardians, we want the best for our kids. And for most of us, their education is not only top of mind, it’s a top priority.

With a solid education, children will have better job prospects. According to the Economic Policy Institute, the average college graduate earned 56% more than high school graduates in 2015. This huge gap illustrates the financial importance of higher education.

To get ahead of the rising cost of education, it is important to start saving and investing early. Not only will compound interest help us reach our financial goals, but we will develop a habit of saving and investing.


The costs for preschool and related early education programs can add up fast.

Depending on where you live and the details of the program, preschool average costs can range from $4,460 – $13,158 per year. If you’re not financially prepared to take on those additional annual costs, you may go into debt or your child may not get to go to school.

With a little preparation, you can stay out of debt and the kids can start learning early. Here are a couple of options to consider.

Start a Sinking Fund

This method can save 1/12 of the annual cost each month into a savings account. This way, by the time the school payment is due, you’re ready to pay the full amount without borrowing.

For example, if preschool is $12,000 per year, then you’d save $1,000 per month to prepare. This method also works well for other annual or semiannual expenses, such as holiday celebrations, birthdays or car insurance payments.

When saving, try to partner with an online bank that provides a high-interest savings opportunity. As of this writing, a lot of these banks are offering close to 2%, which was unheard of just a year ago.

Review Multiple Pre-K Options

Not all preschool programs are created equal. The school that is closest to the child’s home may be convenient, but it could also be expensive.

Take time to investigate other quality programs that could be a better fit for the family budget. You may be surprised at the savings just 15 minutes away.

If the distance isn’t going to work, carpooling with another parent or family may do the trick.

Private School

Not everyone lives in an ideal public school district. And some people prefer private schools for religious reasons. With the average annual cost of elementary private school coming in at $9,398, and private high school coming in at $14,205, choosing to send kids to private school is an extremely important financial decision for families.

Those who choose private schools and want to avoid debt have options, such as utilizing the sinking-fund methodology and shopping around for lower-cost options.

The Tax Cuts and Jobs Act, signed into law in December 2017, allows families to use their 529 college savings account to fund private school, as well.

There are cons to using 529s for non-college education, however. You’ll want to be careful here. Money taken out now to fund private school will lose the major advantages of compound interest. For example, if your 529 was meant for a 6-year-old’s college tuition and instead is used to fund private kindergarten, that child may be in a tough spot when he or she turns 18.


With the cost of college rapidly increasing each year, you need to start preparing today … even if the kids won’t be in college for 10 – 15 years.

The student debt crisis is real. You can help keep the kids from drowning in student loans, but it will take a lot of preparation and action.

Here are some savings routes to consider.

Start a 529 College Savings Account

If you start early and contribute often, a 529 account can grow enough to cover a large chunk of a child’s college costs.

A 529 is a post-tax savings option that allows people to save for a kid’s future college expenses. The money can be invested in the stock market through state-sponsored programs.

Each state has its own program, and programs are not all the same. Some have better investment options, while others may have lower fees. Do your research, speak with a financial advisor and find the best 529 plan for your situation.

Some states allow you to receive tax deductions based on your contributions, as well.

18 years of investing (or even 10) can significantly increase your chances of saving enough for a little one to attend college in the future.

Apply for Scholarships

Another untapped resource for combatting the cost of college is scholarships.

I’ve interviewed parents who have helped their kids cover their entire cost of college, including room and board, tuition and supplies. One parent-and-child duo earned over $700,000 in college scholarships.

This is free money that is waiting to be earned!

One of the major keys to winning scholarships is not giving up. You’re probably not going to win the first scholarship you apply for. You may not even win the first 10, but if you stick with it and improve application skills, free money awaits.

How are you paying for a child’s education? Please let us know in the comments below.

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