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Child saving money for college

You can save for college and retirement. Here’s how.


You’re probably familiar with the financial advice that it’s more important to save for retirement than for your children’s college. And you know what? We agree that retirement savings are high priority. However, we also believe that saving for college sets expectations for your children that they can and will attend college. We’re dedicated to helping families make smart savings decisions for their long-term financial future and, of course, having adequate funds for both retirement and college are an essential piece of that.

The good news is: We truly believe you can (and should) do both. Saving for retirement doesn’t mean you have to take saving for college off the table! And there’s something that both goals have in common: The sooner you start, the better.

We talked to Sean Moore, a certified financial planner who specializes in college savings, about the best ways to go about maximizing your savings strategies for both your and your children’s future. His expertise can help you put together a plan to get started.

“Most days I come across people who wish they had known more, but then they say, ‘Here’s where we are now. What do we do?’” Moore, who is president of SMART College Funding, coaches them on how to begin. “The sooner you start, the less you have to save per month, and the better off you’ll be.”

  1. Start small, start slow, but whatever you do—just start

  2. First things first: it’s most important to tackle high-interest credit card debt (aggressively) and start a retirement savings account through your employer.

    “Take advantage of the match,” he said. “That’s free money. If you don’t do that much, you’ve giving away money. If somebody can save 15 percent toward retirement and then do college, that’s optimal. But the reality is, it’s a balancing act. In that case, put 10 percent on retirement and then chip away at college.”

    Studies have shown that your child is more than twice as likely to go to college if you have dedicated college savings, even if that savings is just a couple hundred dollars. After you allocate your budget to take advantage of retirement matching programs, consider a Florida 529 Savings Plan so that you can contribute what you can, when you can.

    College isn’t an expense; it’s an investment. According to the Bureau of Labor Statistics, persons 25 or older who held a bachelor’s degree had median weekly earnings 60% higher than those with a high school diploma alone.

  3. The rule of thirds

  4. Moore suggests aiming to save for one-third of what college will cost when your child enrolls.
    For a Florida public university with in-state tuition and on-campus lodging, the current total cost for a year is about $21,000. Tuition is about one-third of those expenses. Room and board is actually more: about $11,000, Moore said. The rest covers books, travel, insurance and other miscellaneous expenses.

    Florida 529 Prepaid Plans are helpful when working toward that goal – you can lock in the cost of college tuition and fees now – for less. Plus, their value is guaranteed (risk-free), so it’s a safe investment for your child’s future. Narrowing the focus can make saving for college seem more attainable without sacrificing your retirement savings. You can even purchase Prepaid university dormitory plans as well to check another item off your list.

    The second one-third portion can come in the form of scholarships, such as Bright Futures, or financial aid. That means you would only need to rely on student loans or your child’s contribution for the final one-third. Of course, the total price tag can shrink dramatically if the student lives at home for their college education, or at least starts their education at a state college before transferring to a university.

  5. Make it Automatic

  6. Your retirement contributions are deducted directly from your paycheck, making it convenient to commit a consistent amount each month to help reach your goals. It’s not always easy to create a budget and stick to it—especially with kids—so by automating payments, you’ll quickly adapt to your new budget while knowing you have a solid plan in place.

    Whatever you do and however much you save, we want you to know that it’s enough. Taking steps in the right direction is the best thing you can do for your children’s future without sacrificing your own—and we’re here to help.

Have questions? We’ve got answers! Explore our Frequently Asked Questions to learn more about our Florida 529 Prepaid and Savings Plans. And click here to start your savings now!

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