If your child is in middle school, college just got a lot closer. If you already save for college, that’s great. If you’ve followed the guideline recommended by the financial services company Fidelity, which is to save $2,000 for every year of your child’s life, you may have as much as $24,000 saved by the time your child starts middle school. But if you haven’t started saving yet, or you haven’t saved much, now is a great time to take stock and make a plan.

How to pay for college is “one of the most important financial decisions a parent will make,” says Beth Kobliner, a personal finance expert and the author of Make Your Kid a Money Genius (Even If You’re Not). “The average private college costs as much as a home in many parts of country, so it’s really important to do your homework and plan.”

According to the Department of Education, the average annual cost of tuition, fees, and room and board was $18,632 at four-year public institutions and $37,990 at four-year private institutions in 2014-2015.

Though saving for college is intimidating — especially when you envision saving the full amount by the time your child graduates from high school — remember that knowledge is empowering. For instance, according to the College Board, most families use one-third savings, one-third current income, and one-third borrowing to pay for college.

Here are nine smart steps to take — starting now.

  1. Dig into the numbers

    Use this calculator to play with the numbers and settle on a monthly or per-paycheck amount to save for college. When you get a raise or pay off a debt, increase the amount you save. Even if it’s just $5 more, it’ll add up over time.

  2. Open a dedicated college savings account

    Whatever you can save now means you or your child will have to borrow less for college in the future. While you can open a savings account at a bank, a 529 college savings plan is a better bet because you can invest the funds and withdraw the earnings tax-free, so long as you use the money to pay for qualified education expenses, like tuition, room and board, and even a new laptop for college. (Since you can choose a 529 from any state, check out collegesavings.org to compare different states’ 529 plans.)

    Be sure to open the plan in your name. When your child applies for financial aid, the federal formula currently expects only 5.6 percent of the savings in a parent’s name to be used for college versus 20 percent if the account is in the student’s name. The expected family contribution plays a big role in the type (grants, work-study, loans) and amount of financial aid students are awarded.

  3. Make savings automatic

    Research shows that setting up an automatic transfer from your paycheck to your savings plan is a far more effective savings strategy than attempting to do it on your own. If your employer doesn’t offer an automatic payroll deduction for 529 plans, you can set up a monthly transfer between your checking and college savings accounts.

  4. If it’s appropriate, get family involved

    If your child’s grandparents, aunts, uncles, or godparents want to pitch in, by all means offer them a way to help. Some 529 plans have gift certificate forms you can send to relatives to make it easier for them to contribute. It’s a wonderful way for family members to reinforce the importance of education when giving a birthday or holiday gift.

  5. Check on your investments

    Whether you have a 529 plan already or you’re opening a new one, take the time to learn about what your options are for how your money is being invested. A good rule of thumb is the more time there is before you’ll need the money, the more aggressive (aka risky) the investments can be. As the start of college nears, most experts advise that you adjust your investments so that there’s minimal risk of investment losses.

  6. Encourage your child to contribute

    Talk with your middle schooler about how your family values education, how education can benefit your child’s career prospects and earning potential, and the fact that saving money for college is a priority. Suggest that your child pitch in, too. For example, if your child earns money from part-time jobs or receives cash gifts on birthdays or holidays, ask your child to contribute a small portion to the college savings account. Studies show that kids who participate in saving money for college — no matter how small the amount — are more likely to go to college. And kids from families earning less than $50,000 per year who have $500 or more in their college savings are five times more likely to graduate from college than their peers without any college savings.

  7. Don’t neglect your retirement

    Though it may be tempting to redirect all or part of your retirement savings toward your child’s college savings, Kobliner advises parents not to do it. After all, as Kobliner points out, your child can borrow money for college, but you can’t really borrow money for retirement. When you apply for federal aid down the road, money in your IRA is protected savings and doesn’t count against you, Kobliner says.

  8. Get familiar with financial aid

    Many middle-class parents assume their children won’t be eligible for financial aid because their income is too high. In fact, about 80 percent of families receive some kind of financial aid (including federal loans). And a surprising 70 percent of students at private nonprofit colleges whose parents earn between $150,000 and $250,000 were still able to receive grants, according to Kobliner. So unless you are uber-wealthy, it makes sense to apply for financial aid. It’s important to understand, though, that about 38 percent of that aid is given in the form of a loan, not a grant, so it will need to be paid back.

  9. Start looking at scholarships

    Even middle schoolers are eligible for many college scholarships. Now is a great time to find some suitable scholarships and have your child apply. Not only is it a tangible way for your child and your family to start thinking about what it means for your child to be college-bound, but applying for scholarships can serve as terrific essay-writing practice that will serve your child well in high school and beyond.

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Updated: June 18, 2019