Overview: Balancing college savings and household wealth
Guest Columnist Al Riddick, President of Game Time Budgeting, outlines a practical strategy for parents navigating College Savings Month. Instead of stretching household budgets to a breaking point or sacrificing long-term retirement security, Riddick explains how starting small, leveraging local Minnesota grants, and keeping broader financial goals intact leads to sustainable family success.
September is College Savings Month, which means families may be hearing plenty of advice about putting money aside for their children’s college education.
Saving for college is important. But there’s another part of the conversation that deserves just as much attention: How do parents help their children pay for college without putting their own financial future at risk?
Start early and prioritize consistency over perfection
The biggest advantage parents have when saving for college is time.
You don’t have to save the entire cost of college yourself. The goal is to start early, save consistently and give your money time to grow. If $50 a month is what fits your budget today, start with $50. If you receive a tax refund, bonus or monetary gift, consider putting a portion toward college savings.
Focus on consistency rather than perfection. You can always increase the amount as your income changes.
Protect your retirement at all costs
Don’t make the mistake of treating college savings as the household’s only financial priority.
I strongly encourage parents not to sacrifice their retirement security to pay for their child’s education. Your child may have access to scholarships, grants, work-study programs or student loans. There isn’t a similar loan program for retirement.
You don’t want to graduate your child from college while simultaneously creating a retirement crisis for yourself.
Strategies for late starters and high school parents
What if your child is already in high school and you haven’t saved anything? Don’t panic and don’t give up.
You may not be able to save enough to cover the entire cost of college in a few years, but you can still make a difference. Have an honest conversation with your child about what your family can afford. Then look at ways to manage the cost of the education.
That might mean considering community college, an in-state school, work-study opportunities, scholarships and grants. College planning isn’t just about saving money. It’s also about managing the cost of the education.
Utilize Minnesota resources and federal aid
Minnesota families have resources that can help. The Minnesota Office of Higher Education’s Paying for College resources provide information about financial aid, grants, scholarships, loans and other ways to pay. The agency also provides information about the Minnesota State Grant, which helps eligible students from low- and moderate-income families attend participating Minnesota colleges and universities.
Students should also complete the FAFSA, even if they don’t think they’ll qualify for financial aid. The application is used to determine eligibility for federal, state and college-based aid.
Build a complete household financial plan
One mistake I see parents make is saving for college without having a broader financial plan. Parents can become so focused on paying for their child’s education that they overlook emergency savings, high-interest debt or retirement.
College is important. But it shouldn’t be the only financial goal in the household.
The goal isn’t necessarily to pay for 100% of your child’s college education. The goal is to help your child pursue an education without putting your family’s financial future at risk.
That’s what responsible college planning looks like.
Al Riddick is President of Game Time Budgeting, an award-winning financial fitness firm that helps employees develop simple and easy-to-duplicate systems for making their money behave.