College can feel far away during the years of field trips and after-school activities, but the time passes quickly—and education costs add up. You may not know which path your child will choose, but you can start saving with enough flexibility for college, trade school, or other training. A realistic goal and a few manageable steps can make the process feel less overwhelming.
Five Steps to Start Saving for College Now
If college is five years away or less, focus on progress rather than perfection. The SPARK method can help you build a practical plan that fits your budget.
S — Set a realistic goal. Decide what portion of college expenses you want to cover. Use a College Savings Calculator to estimate a monthly savings target based on your timeline.
P — Pick the right place to save. Compare 529 plans, savings accounts, and CDs based on your timeline. Explore education planning resources as you consider your options.
A — Automate your contributions. Schedule a manageable recurring transfer.
R — Reduce future costs. Look for scholarships, dual enrollment, AP credits, and lower-cost college pathways. Eligible students can also explore First Mid scholarships available in Mattoon, Illinois, and surrounding communities.
K — Keep learning and adjusting. Review the plan annually and involve your child in age-appropriate saving and planning.
What If You Haven’t Saved Enough for College?
You don’t have to save the full cost of college for your efforts to matter. Start with each college’s net price calculator to estimate what your family may pay after grants and scholarships and complete the Free Application for Federal Student Aid (FAFSA) even if you don’t expect to receive need-based aid.
Families often combine savings, current income, scholarships, grants, student earnings, and financial aid. If borrowing is necessary, compare loan amounts, rates, and repayment terms carefully. The goal is to reduce the gap without putting your own financial security at risk.
Why Early Financial Education Matters for College Savings
Saving for college can also teach children lasting money skills. Setting goals, making deposits, and watching their savings grow shows them how small choices add up over time.
Children’s savings accounts are gaining momentum nationwide. By the end of 2025, 129 programs across 42 states and Washington, D.C., had reached nearly 8 million children and youth.*
Created specifically for Mediapolis Community School District students in Iowa, the Bulldog Saver Program is a school-based partnership with First Mid Bank & Trust. During scheduled banking days, students can make deposits while learning to set goals, make smart money decisions, and build healthy saving habits.
Make Your College Savings Plan Your Own
No two families start from the same place. Choose a realistic goal that fits your timeline and budget, take consistent steps, and adjust your plan as your family’s needs change. Even a modest amount can help make future education costs more manageable.
Want help deciding what comes next? Schedule a free consultation with a First Mid advisor to discuss your college savings goals and available options.
Frequently Asked Questions About Saving for College
As you build your plan, you may have questions about savings goals, account options, financial aid, and what happens if your child’s plans change.
How much should I save each month for college if I’m starting late?
Work backward from a specific goal. Subtract what you already have saved from your target, then divide the difference by the number of months until college. For example, saving $6,000 over five years would require $100 per month before interest. If that amount doesn’t fit your budget, lower the target, continue saving while your child is enrolled, or supplement your contributions with bonuses, tax refunds, and monetary gifts.
What is the best type of account for college savings?
It depends on when you’ll need the money. A 529 plan may offer tax benefits when funds are used for qualified education expenses, but investment options can lose value. A savings account or CD may provide greater stability when college is approaching. Some families use both: a 529 for potential tax benefits and savings for expenses coming due soon.
Should I save for my child’s college or my own retirement first?
Protect your retirement before stretching your budget to fund college. Students may have access to scholarships, grants, work-study programs, and loans, but you cannot borrow for retirement. At minimum, consider maintaining emergency savings and contributing enough to receive any available employer retirement match. You can then direct an affordable amount toward college and increase it as your finances allow.
Does college savings affect financial aid eligibility?
It can, but the effect is often smaller than families expect. A parent-owned 529 is generally reported as a parental asset on the FAFSA and receives more favorable treatment than student assets. Under current FAFSA rules, a grandparent-owned 529 generally isn’t reported, and qualified withdrawals aren’t counted as student income. Other accounts and schools using the CSS Profile may apply different rules, so families should still apply for financial aid.
What happens to a 529 plan if my child doesn’t go to college?
The money can still support other education paths, including eligible trade schools, vocational programs, and registered apprenticeships. You may also leave it invested for future education, change the beneficiary, or, subject to specific requirements, roll a limited amount into the beneficiary’s Roth IRA. You can withdraw the money for another purpose, but income taxes and a federal penalty may apply to the earnings portion.
*Source: Prosperity Now
This information is for general educational purposes only and is not intended as financial or tax advice. Consult a qualified financial or tax professional regarding your individual situation.