National College Savings Month: How to Start Saving for Education

Whether you’re saving for a child, grandchild, or another loved one, starting with a clear strategy can help make future education costs feel more manageable.

The good news is that you don’t need to have every detail figured out before you begin. Understanding your goals, exploring your savings options, and making education planning part of your overall financial picture can help you take the first step.

National College Savings Month is observed each September to encourage families to plan ahead for future education expenses. While college may be the first thing that comes to mind, education planning can also include expenses for K–12 education, trade schools, and other qualified educational opportunities, depending on the savings option you choose.

The earlier you begin, the more time you may have to build your savings. However, it’s never too late to create a plan. Even if college is only a few years away, setting aside money and exploring your available options can help you prepare for upcoming expenses.

The best place to start is by identifying your goal and timeline. Consider how many years you have before the funds may be needed and how much you would like to contribute toward future education expenses.

You may find it helpful to ask yourself:

• What type of education am I planning for?
• When will the funds likely be needed?
• How much can I comfortably set aside each month or year?
• What other financial priorities should I balance alongside education savings?

You don’t have to save a large amount all at once. Regular contributions—even smaller ones—can help you build the habit of saving and make progress toward your goal over time.

There is no single best way to save for education. The right approach depends on your timeline, financial goals, risk tolerance, and the type of education you’re planning for.

Some education savings options are specifically designed to help families save for qualified education expenses, while others can be used as part of a broader savings strategy.

A Coverdell Education Savings Account (ESA) is a tax-advantaged account that can be used to save for qualified education expenses. Depending on the circumstances and applicable rules, funds may be used for certain qualified elementary, secondary, and higher education expenses.

Coverdell ESAs have contribution limits, income eligibility requirements, and other rules that should be considered before opening an account. Because tax rules and individual circumstances vary, it can be helpful to speak with a qualified professional about whether a Coverdell ESA is appropriate for your situation.

A certificate can also be a useful way to set aside money for a future education goal. Certificates generally offer a fixed rate for a specific term, providing a predictable way to save.

For families with a defined timeline, certificates may be one component of an education savings strategy. For example, as the time to use the funds gets closer, you may prefer to place a portion of your savings in an account with a known term and fixed return rather than leaving all of your funds in one type of savings vehicle.

The right approach depends on when you’ll need the money and how the funds fit into your overall financial strategy.

Education savings is often just one of several important financial goals. You may also be building an emergency fund, saving for retirement, investing for the future, or paying down debt. 

Looking at these goals together can help you make decisions that support your overall financial well-being. Rather than focusing only on how much you should save for college, consider how education planning fits alongside your other priorities. 

Working with a financial professional can help you evaluate your goals, timeline, and current financial situation. They can help you create a strategy designed around your individual needs and adjust your plan as your circumstances change.

At Lafayette Federal, we understand that preparing for education expenses can be an important part of planning for your family’s future. 

Coverdell Education Savings Accounts can provide a tax-advantaged way to save for qualified education expenses, subject to applicable eligibility requirements and contribution limits. 

Certificates offer another way to set aside funds for future goals while earning a fixed rate over a specific term. Depending on your timeline and financial strategy, they may play a role in your education savings plan. 

For members looking at the bigger financial picture, Lafayette Private Wealth offers financial planning services that can help you consider education savings alongside retirement planning, investments, and other financial goals.¹