The cost of college isn’t what it used to be. Today, families are facing higher bills, more financial pressure, and tough choices about how to support their children’s future without putting their own goals on hold. If you’re a parent planning for your child’s education, it’s important to know how college savings can affect your long-term goals—including your ability to enjoy financial independence and possibly an early retirement.
Let’s break it down in simple terms.
College Costs Keep Rising
The average cost of college in the U.S. is $38,270 per student per year. That includes not only tuition, but also books, supplies, and all those day to day expenses. That number is hard to ignore—especially when you realize that many families aren’t ready to cover it. According to a 2024 survey by College Ave, fewer than half of parents with a child in college—just 44%—felt ready to pay their child’s first tuition bill.
One reason families feel the strain? College costs have more than doubled since the year 2000. The compound annual growth rate (CAGR) of tuition is currently 4.04%. That means expenses continue to rise year after year—and it’s not slowing down.
How College Savings Connects to Your Bigger Goals
As a parent, it’s natural to want to help your child succeed. But if you’re not careful, covering the full cost of college could affect your own financial path. Some parents take on loans, drain savings, or put off retirement saving—moves that can delay financial independence and put retirement dreams out of reach.
Saving early and building a college plan that fits your family’s budget can help you stay on track. It’s not just about helping your child—it’s also about protecting your financial security.
Here’s how saving for college the smart way can support both your child’s future and your own:
- Start Early: The earlier you begin, the more time your money has to grow. Even small amounts set aside regularly can add up.
- Use Tax-Advantaged Accounts: Options like 529 plans offer tax benefits and can be used for tuition, housing, and other education expenses.
- Talk About Costs: Have open conversations with your child about what’s affordable, and what types of schools or scholarships may make sense.
- Balance Your Priorities: Don’t stop saving for retirement while you save for college. Your child can borrow for college—but you can’t borrow for retirement.
Building a Plan That Works for You
College doesn’t have to be all or nothing. Some families choose to cover a percentage of the total cost, with the student working part-time or applying for scholarships to fill the gap. Others may use a mix of savings, loans, and grants. There’s no one right way—but it helps to have a plan.
That’s where college savings planning comes in. When you understand how saving for college fits into your overall picture, you can make choices that support both your child’s education and your own future goals. With careful planning, you can avoid common financial mistakes and feel more confident in your decisions.
What It Means for Retirement
Without a plan, the cost of college can get in the way of achieving financial independence. Some parents delay retirement or reduce their savings during college years. Others may feel pressure to work longer than expected. When you set clear goals and stick to your priorities, you’re more likely to stay on track for early retirement—without sacrificing your child’s education.
Saving Smart for the Future
Saving for college isn’t easy, but it’s not impossible either. With rising costs and a growing need for education, the right plan can make all the difference. Think of it this way: preparing now isn’t just about paying tuition. It’s about building long-term financial security—for you and your child.
At TandemGrowth Financial Advisors, we believe every family deserves to feel confident about the future. Let’s talk about how we can help you save for college without putting your other dreams on hold.
About the Author: Jeff Bernier
