Should All Families Have a College Fund?

If you have children then you may hope that one day they will be able to go to college. Obviously, there are lots of advantages of doing this but one big problem is the cost. The cost of going to college is high and so it is always worth families thinking about how they will manage those costs. One option is to have a college fund.

Advantages of a college fund

Having a college fund will mean that you will have money available to help out your child when they go to college. There will be money available for the to be able to use towards the costs of college, whether that is the fees or the costs of living away from home or both. Having money already available in a pot means that there is less of worry when the money is needed as it can be drawn from. This will also allow the child/ren to know that they have something to work towards. If they feel that with no college fund there will be no college, they may not feel so much motivation to work hard at school as they will have no further education afterwards.

Disadvantages of a college fund

To get a college fund you will need to pay money into it. This would usually be done on a regular basis form when the child is born. This means that you will be using a chunk of your income towards doing this which could alternatively be used elsewhere. It might mean that you will have to go without other things and this could make things tight. You might even feel that you will have to borrow money to make ends meet so that you can continue to do it. It is worth applying some common sense and only saving what you can afford and hope that any times when you are struggling to put money in will be outweighed by the times when you are easily managing to put money in and feel that you can even pay in a bit extra.


It is worth knowing that there are alternatives to having a college fund so that you can consider these as well. These might be useful for anyone who has left it too late to save a significant amount or if they just did not have the money to be able to save. Firstly, the student might be able to get a payday loan for the course and manage that way. Student loans tend to be repaid over a long period of time once the course ends and therefore should be easier to manage than standard loans. It may also be possible to get a scholarship or bursary depending on whether the student can qualify for these. It is well worth finding out what is available and whether there is something of interest and use. It could be that attending a local college and remaining living with parents could be a much cheaper option. Then parents can continue to pay living expenses, if they agree to and the student will only have to find the money to cover the course fees. The student could do a part-time job while studying to support themselves. They might be able to study full-time and work-part time but this will depend on the demands of the course and they might find that they will have to study part-time in order to fit in work as well. Another possibility is that parents might be able to support the student themselves even without a college fund. If one parent was not working when the child was living at home or only working part-time they could get a job and give the money to their child to help them to cover all the costs that they will have. Some parents may not be in a position to do this; perhaps because they need the money themselves or cannot work, but it is a possible solution for some.

It is well worth thinking about your options, both when you first have a child and then later in their lives as they start to make decisions about their future. If you have a college fund and they do not go to college you will still be able to use the money for other things such as towards their first home or you could just use the money yourself. However, without a fund it might be trickier for them to manage and you may not be in a position to help them. The more children you have, the harder it will be for you to be able to afford to support them. This means that you will need to think harder about how much you might need to save each month and how early you want to start. The earlier you start the less you will need to save each month and the easier it will be to get a significant pot of money together by the time it is needed.