Skip to Content
African-American mother and young teenage daughter taking a selfie and family is planning for her college.
College Planning

Child college fund

These five little steps could help you start a college fund for a baby, which can help secure peace of mind for you and secure higher education for your child.

1. Get an idea of what your child's education will cost in the future

Given a five percent annual rate of inflation on college costs, your child's college tuition, room, and board could easily set you back twice (or even thrice) what you paid for your own college education. You can get a more comprehensive idea of what both two year and four year private and public universities (in-state or out-of-state) will cost in the year that your child will enroll from The College Board's College Costs Calculator.1

2. Calculate the costs of raising a child (or two)

If you're an expectant parent, you might not have a fully-fledged idea of what the costs of regular child care, food, and other necessities will actually run you on a monthly basis. According to the U.S. Department of Agriculture's Expenditure on Children by Families Report, the estimated cost of raising a child is a jaw-dropping $233,610. That comes to nearly $13,000 annually per child for food, shelter and other necessities from birth through the age of 17.2 CNN Money offers a calculator to help you estimate the costs of raising children. 

3. Start a 529 College Savings Plan

Once you have researched what higher education will cost, and how much having a child will cost you, you'll probably have a good idea of how much you can allot to their college savings each month. A dedicated 529 Savings Plan is one of the most tax-beneficial and efficient ways to build a college fund for baby. A 529 plan provides tax-deferred growth, allowing your investments to grow without having to pay taxes on them. As long as you withdraw money to pay for qualifying education expenses, your withdrawal will be tax-free. If you choose to set money aside in a regular savings account, you could be missing out on these significant tax benefits on your child's college savings.

4. Give yourself a refresher on financial aid lingo

It may not seem particularly urgent, but you should familiarize yourself with contemporary financial aid lingo and make an effort to understand how the college application process works. It's good for parents to have a thorough understanding of what kind of financial aid options are available to both them and their children, just in case that 529 Savings Plan doesn't actually fund itself in 18 years' time, or baby doesn't turn out to be an actual baby genius.

5. Choose the best ways to contribute to you child's college funds account

Doting grandparents, aunts, and uncles might be anxious to assist you with plumping up your baby college fund. If they express an interest in contributing, be sure to inform them about the most tax-beneficial ways to gift money for college. And don't forget to deposit those personal checks into your college fund when birthdays and major holidays roll around.

If you'd like to learn more about starting a 529 College Savings Plan for your child, or you'd like to ensure that you're not saving for college the wrong way, there's a ton of helpful college-planning info on offer in our Protective Learning Center.

NOTE:  As of 2018, the IRS has amended the term “qualified higher education expense” to include a limited amount of annual expenses from a 529 Plan for tuition at an elementary or secondary public, private, or religious school.  Source:



Arrows linking indicating relationship

Related Articles

Female sitting in a desk chair in a room with a large window.

Five important steps before you complete the FAFSA

Learn more
Happy daughter and father share a hug

Student loans: Can parents pay off their child's college debt?

Learn more
Illustration of two families posing with happy college graduates.

Quiz: Are you financially prepared to send your child to college?

Learn more

All Learning Center articles are general summaries that can be used when considering your financial future at various life stages. The information presented is for educational purposes and is meant to supplement other information specific to your situation. It is not intended as investment advice and does not necessarily represent the opinion of Protective Life or its subsidiaries.

Learning Center articles may describe services and financial products not offered by Protective Life or its subsidiaries. Descriptions of financial products contained in Learning Center articles are not intended to represent those offered by Protective Life or its subsidiaries.

Neither Protective Life nor its representatives offer legal or tax advice. We encourage you to consult with your financial adviser and legal or tax adviser regarding your individual situations before making investment, social security, retirement planning, and tax-related decisions. For information about Protective Life and its products and services, visit

Companies and organizations linked from Learning Center articles have no affiliation with Protective Life or its subsidiaries.