By Maura Keller
For decades, the greatest financial worry for most American families was whether they would have enough money to live on in retirement. Today, that concern has been overtaken by a different, and often more immediate, question: How will we afford a college education for our children?
If you’re like more than half of American parents who expect their children to attend college, chances are you haven’t saved enough to fully cover the cost. Between everyday expenses and major financial demands — from car repairs to home maintenance — it’s easy to postpone college savings. As tuition continues to rise, families are recognizing that thoughtful college planning can make a meaningful difference in managing costs.
PAYING FOR COLLEGE
News headlines frequently highlight the rising price of higher education, and for good reason. Families with little or no savings often find it difficult, if not impossible, to cover college expenses solely through just their income(s). The good news is that paying for college isn’t usually only through one source.
“Parents think they can, or will, borrow 100% of the cost of college. That’s not a plan to pay for college,” says Karla Losey, CFP, vice president and wealth advisor at Johnson Financial Group.
In reality, most families rely on a patchwork approach that combines savings, current income, student loans, scholarships, grants, work-study programs, and sometimes home equity or summer earnings. The key is setting realistic goals and understanding the options available.
Losey notes that one of the most common mistakes parents make is being overwhelmed by the total cost of tuition and other expenses.
“They see that number and think they need to aim to save the full amount,” she says. “It’s an overwhelming number — and they don’t [have to] save all [of it].”
WHY STARTING EARLY MATTERS
The most powerful tool families have is time. Starting to save for college early allows savings to grow through compounding, even in volatile markets. Small, consistent contributions over 17 or 18 years can make a meaningful difference by the time a child graduates high school.
Losey says often, people wait too long to start saving.
“[But] you need time for the funds to accumulate and to grow,” she adds.
Parents often believe they can’t afford to save for college while raising a family.
But Losey emphasizes that any amount saved is better than nothing.
“It is never too late to start,” she says. “Anything you save is better than zero.”
A helpful starting point is deciding how much of the bill you plan to cover. Some parents aim to pay tuition, room and board at a public university, while others expect their child to contribute more if they choose a private school. These decisions should be discussed early so expectations are clear.
“If you expect your child to contribute to the cost of their education, the conversation needs to take place early,” Losey explains. “That way, they grow up understanding and accepting the plan.”
Saving for college also isn’t just about building an account — it’s also an opportunity to teach lifelong money skills. Losey encourages parents to help children learn day-to-day financial management while they’re still at home.
“Get them started with a checking account when they’re old enough,” she says. “Show them how to track purchases and balances. If they have part-time jobs, help them learn to save a percentage, spend some and donate some.”
These lessons can prepare students to manage expenses responsibly once they’re on campus — and beyond.
PLANNING WITH PURPOSE
For parents who delay saving for college expenses, planning becomes even more important. Losey recommends meeting with a financial professional to assess what can realistically be saved and how remaining costs will be covered. Families may also plan to pay expenses monthly during the school year, though those payments can be significant.
And scholarships should never be overlooked.
“There are so many opportunities available,” Losey says. “You just need to look for them and apply.”
Ultimately, she says, the most important step is the simplest one.
“Meet with a planning professional, make a plan that works for your family and start saving as early as you can,” Losey says. “That’s the key.
