Military Finances 101: Is it Too Late to Save for College?

If you're an Active or Retired Senior Military Officer or NCO, between GI Bill and Disabled Veterans' benefits you may have college funding covered. But that isn't always the case and for many military families and individuals, saving for college can be daunting. With the rising costs of tuition, books, and living expenses, it’s no wonder that the prospect of funding higher education can feel overwhelming. However, the belief that it's too late to start saving is a common misconception. In fact, it's never too late to begin planning and saving for college, and there are numerous strategies and resources available to help make this goal a reality.

The Rising Costs of Higher Education

According to the College Board, the average cost of tuition and fees for the 2021–2022 school year was $10,740 for in-state public colleges, $27,560 for out-of-state public colleges, and $38,070 for private colleges.¹ These figures represent a significant financial burden for many families, but they also underscore the importance of starting to plan as soon as possible.

Is it Too Late to Save for College?

One of the most common misconceptions about saving for college is that if you don't start early, it's too late to make a meaningful impact. This simply isn't true. While starting early certainly has its advantages, there are still plenty of steps you can take to prepare for college, no matter where you are in your financial journey.

Tips for Saving for College

Whether you’re saving to go to college yourself or saving for a child or grandchild, it’s never too late to start. Here are some tips to help you save for this financial goal:

Assess Your Current Financial Situation
The first step in any financial planning is understanding where you stand. Take stock of your income, your expenses, and any existing savings or investments. This will give you a clearer picture of how much you can contribute to a college fund.

Create a Realistic Savings Plan
Based on your financial assessment, set a realistic savings goal. Even small, consistent contributions can add up over time. Automate your savings if possible so a portion of your income goes directly into your college fund.

Explore Financial Aid and Scholarships
Even if you haven't been saving for college, there are still opportunities to lessen the financial burden. Fill out the Free Application for Federal Student Aid (FAFSA) to determine your eligibility for federal grants, loans, and work-study programs.² In addition, research scholarships and grants are offered by colleges, organizations, and foundations.

Research Work-Study Programs
For those already in college or planning to attend soon, work-study programs can provide valuable experience while helping to cover educational expenses.

Consider Tax-Advantaged Accounts
There are several types of accounts specifically designed for education savings, such as 529 plans and Coverdell education savings accounts. These accounts offer tax advantages and can help your savings grow faster.

The Power of Compound Interest

One of the key advantages of starting to save early is the power of compound interest. However, even if you're starting later, compound interest can still work in your favor. Every dollar you save now can grow over time, earning interest on top of interest. By contributing regularly and letting your money work for you, you can make significant strides toward your college savings goals.

It's never too late to start saving for college. While starting early has its advantages, there are still plenty of ways to make meaningful progress toward funding higher education. You can take proactive steps toward achieving your educational goals by assessing your finances, exploring financial aid options, utilizing tax-advantaged accounts, and creating a realistic savings plan.

Military Finances are Different

As mentioned in the first paragraph, as an Active or Retired Senior Military Officer or NCO you have college funding options that aren't available to your civilian counterparts. And if you work with a financial advisor or planner that isn't aware of your unique veterans' benefits you may end up with a sub-optimum plan for funding college. That isn't the only time your finances will be different than your civilian counterpart. If you're an Active or Retired Senior Military Officer or NCO, we think you should work with an advisor that understands those differences. If you'd like to find out how we do that, use the button below to schedule a free initial consultation.

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