Baby Steps

Amy Charlene Reed

SHORTLY BEFORE MY first child was born some two decades ago, I read a newspaper column urging parents to begin saving for college early in their children’s lives. Today, my son is not far from getting his bachelor’s degree in engineering, debt-free and (fingers crossed) with a bit in the bank for his master’s degree. My daughter starts college this fall and is on track for the same outcome.

I feel like we’ve been a real life middle-class experiment, showing what happens when a family starts saving for college while little ones are still in diapers. As I’ve watched children of other families grow up around me through Legos, robotics teams and college applications, I’ve seen alternative outcomes—where families didn’t start early. Having lived this journey, here’s what I’ve learned:

Being bright doesn’t guarantee a full ride. I’ve witnessed families who didn’t save for college because their children were truly bright, often at the head of the class or even the entire grade. I met one such father in the grocery store recently. As our talk turned to our little darlings, he grimaced, put his hands to his face and said, “I don’t even ask any more about her student loans. I don’t want to know how much debt she’s in.”

His daughter, brilliant at math, was her high school’s salutatorian and he had assumed that merit scholarships would fully cover college. As it turned out, scholarships did cover her tuition. But then there’s the pesky matter of living expenses: dorm room, meal plan, transportation, laptop, cell phone and more. It adds up over six years. Yes, six years: Most bright kids today don’t dare stop at a bachelor’s degree and plow right on through to their master’s.

You’d be amazed what $25 a month can do. Soon after our first child’s birth, we started saving $25 a month in a Coverdell account at our local credit union. As soon as we could carve $50 a month from our budget, we moved up to a Vanguard 529 account. We put the money into a basic index fund covering the U.S. stock market. Later, we got fancy and added an international index fund. We never looked at the ups and downs. We just left it alone and kept adding to it with monthly automatic contributions.

If you start this early, you will be so thankful of the options that your precious child has upon graduating high school. You will also bear witness, sometimes heart wrenchingly so, to the options available to your child’s high school friends whose parents didn’t save. Starting with just $25 a month, you will be absolutely amazed at how this little bit of money adds up in the end, especially as you increase your monthly contributions over time.

Amy Charlene Reed is a science and energy writer who lives near Oak Ridge, Tenn.

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