The costs seem to increase every year, but if you've got a great college saving plan for your kids, you have nothing to worry about. One of the greatest costs associated with raising kids and one that causes most parents to throw their hands in the air in total defeat is college cost. In recent years, the cost of college tuition has been on an upward climb.

It is actually estimated that the average cost of a four-year education is going to hit $303,000 by the year 2036. That is certainly a lot, but if you save up for that college tuition, you can send your kids to the school of their dreams. Now, while saving for college can seem like an insurmountable task, it is possible if you do it wisely.  You may end up making a major dent in your tuition bills, simply by avoiding some of the mistakes we are going to talk about below.


It’s not easy to save for college, and therefore, you shouldn’t make it hard on yourself. By avoiding college saving mistakes early, you won't see so many problems along the way. In this review, we look at three college saving habits that most people have been doing wrong. And don't worry, we don't just talk about the mistake, you're going to learn how to do college saving right too.

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Mistake: Delaying The College Saving Plan

While it is great to finally start saving for your kid’s college, it is wrong to start doing it too late. Many parents assume that they shall get a loan when the time comes to pay for their kid’s tuition, but this is the wrong mentality and you are doing things wrong. The problem with this plan is the fact that a loan is not guaranteed, and even when you get the loan, you may not receive the whole tuition.

That can mean that your kid will end up having arrears while they study. The best way to start saving for your kid’s school should be immediately after they are born. Start slow, and keep some little money aside, and when they finish each step of their education, keep adding to the college tuition fund, so you can relax when you take them to college.


The money you save shall also come in handy when you need to top up the loan you may receive from the bank. Imagine if you set aside around $300 each month for your child’s college tuition, and you start as early as when they are younger. By the time they are 18 years old, you may end up with more than $80,000. This will be more than enough for them to start college.

Mistake: Keeping The College Tuition Funds In A Regular Savings Account

Starting a college fund for your kid is a great way to save for college, but keeping the money in a regular saving account in the bank is wrong. Of course, this means that your money is safe and you do not risk losing any of it. Butyou end up stunting its growth tremendously by placing it there. It’s even worse if you do not get any tax benefits from it by keeping it in the savings account.

It is better to keep paying taxes each year from the interest you earn from this saving rather than keeping the money stagnant until your kid starts college. Now, in the above point, we calculated that a saving of roughly $300 a month, can help you save up to $80,000 by the time your child starts college.


If you decided to invest this money in say, a 529 savings account, with a little interest of about 7%, you could end up with around $122,000 by the time you need to use the money. This is a better way of saving.

Mistake: Not Using A Roth IRA Account

Most people are actually not big fans of 529 plans, because they are too rigid, which means that the money can only be used for tuition only. If you are feeling helpless about how to invest, do not worry, there are lots of other options.

Deciding not to invest college tuition funds is wrong. There are plenty of options, such as using a Roth IRA. This gives you a tax-free growth on your money, but also provides more flexibility on the use of the money. For example, if your child gets a huge scholarship, you can end up using the excess cash for your retirement.

The only drawback with a Roth IRA is that you have a limit to the annual contribution, and currently if you are under 50, you can only contribute $5,500 per year, while if you are over 50, you can only contribute $6,500 each year. Higher earners are also not eligible to open a Roth account.

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How To Avoid College Saving Mistakes Conclusion

Saving money is hard work, and the last thing you want to hear is that you have lost all of your money. One of the things that most people do wrong is not understanding what a college saving habit can do for you in the long-run. We hope that the above few points will give you ideas on how to save better for your future scholar's tuition.