Author: Nicole McDonald, Blogger, Mom Saves Money

For today’s blog, NEST 529 is pleased to feature Account Owner Nicole McDonald, mom of three and author of the Mom Saves Money blog, offering tips for busy families on cooking, couponing, budgeting, and more. Nicole has authored four books, including ‘The Extraordinary Art of Budgeting’. Today, Nicole will share four tips for contributing to your NEST 529 account on a tight budget!

family.pngHow do you fund your kid’s college fund when your budget is already tight? When the kids are young, their college years seem far away. There are other financial pressures when raising a family with small children and a college fund may not even be on the radar. Today I will share creative ways to save for college without significantly impacting your monthly budget.

I left the military and became a stay-at-home mom in 2006. We transitioned from two incomes to one that year, became first-time homeowners and added two more children a few years later. Growing to a family of five, our finances were strained and our budget left little wiggle room. It felt like the financial struggles during that time left no room for saving for the future.

I started college funds for my kids while they were young with a very small starting contribution, an amount we could afford at the time. Education costs are rising and one of the best ways we can set our children up for success is to provide them with a college fund. I used these four strategies over the years to continue to fund their college accounts and invest in my children’s future without affecting our month-to-month finances.

How to Fund Your Child’s NEST 529 Account on a Budget

  1. Make it Automatic

Make your monthly NEST 529 contribution automatic, even if you start small with $10 a month. Every contribution adds to your child’s college fund and it will continue to grow. If you wait until the right time to start investing in their college funds, it may never come, and that’s why it’s important to start early and make it automatic.

The earlier you start investing, the more time your child will have for that money to grow. Start small with an amount you can afford and set it up as an automatic deposit. As you can afford to invest more or when you get a raise at work, don’t forget to increase your monthly contribution. When you set up a small automatic contribution, it won’t drain your budget, but will continue to grow their college fund over time.

  1. Save Your Change

If you’ve ever cashed in a change jar, you know the coins add up fast. A tip I learned from The Budget Mom is to budget in whole dollar amounts, always rounding up. Any loose change gets added to a money jar and is deposited in a college fund at the end of the year. If you use a cash-only budget for your purchases, your jar will fill up fast. Even if you are making automatic deposits, consider filling up a change jar to give an annual boost to each child’s college fund. Every penny counts.

  1. Contribute a Percent of Unexpected Windfalls

Decide now what percent or dollar amount of unexpected income or windfall you want to donate to 529 accounts. Since windfalls aren’t included in a normal monthly budget, it won’t dip into your regular living expenses. Did you sell a used item and make some cash? How about that tax refund? Were you given a cash gift? Or, did you earn a well-deserved cash bonus at work? Consider allocating a portion of that unexpected income to your child’s 529. Determine in advance what percent of windfalls you’ll contribute to their college funds, and then make the deposit.

  1. Encourage Family and Friends to Contribute

Did you know grandparents, aunts, uncles and other family and friends can contribute to your children’s college funds? Encourage family members to give your children the gift of education. Most college plans include printable gift coupons that your friends and family can mail in with their contribution. Instead of more toys as gifts, encourage an investment in their future.

I hope these tips help you find creative ways to contribute your children’s college funds on any budget. The most important step is to set up a college fund for your kids TODAY. Every small contribution makes a difference.