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Thinking about saving up some money so the kiddos can go to college? That’s great! But, be sure not to skip step #11, investing in retirement!


If you polled 100 middle-aged people and gave them the option of:

  1. Getting their college costs paid for when they were a kid, but needing to pay for and house their aging parents, OR
  2. Getting no money for college, but their parents are financially stable and in no need of help today…

…I’m thinking the majority would rather their parents have saved up for retirement, and spared their kids the burden of taking care of them later in life.

So, once again, be sure to save appropriately for retirement, and THEN take this step!

So how do you save up for your kids’ college?

We’re currently doing it through our state’s 529 plan, which means the growth on our investments is tax free. You’ll have to see what your state offers and if it’s worth investing in, but it’s a solid investment option for most.

If you need to invest another way, then putting money into a regular index fund works too! There will be taxes on the growth of the investment, but it often still beats just saving up cash with no returns!

Want to read more about your options and what you should do? Check out the resources below!

And a HUGE resource, my eBook – The Debt Free Degree

Questions about Step 12?


  1. We’re saving a bunch of money early and letting our investments do the work for us!

    How are you approaching this one? How much will you be putting away for your kids’ college?

  2. Derik, please keep reinforcing that young couples start their children’s college savings (along with retirement) as early as possible. One of our biggest financial mistakes as a young couple was thinking that we had plenty of time to save and it didn’t happen soon enough.

    • A great point. Even a great reminder for me and my wife! We have saved well for our kids’ college, but it is pretty easy to think that we’ll have more money later and can fund it better then…but it’s totally NOT TRUE! Saving early is the way to go, no matter how difficult it may feel!

      • I just signed up for the Oklahoma 529 plan so i can get a nice tax deduction and give my nephew a little bit of help for college. Im thinking this a win all around. Lower my tax bill and help out a family member. Good idea? Or bad idea?

        • Hi Bobby. Interesting idea!

          I did a little research on this one and it seems like you’re right. You can open an account for your nephew and receive tax deductions for your contributions. Sounds like the only downside might be that when your nephew starts using the funds for college, it will actually be treated as income, which might mess up his ability to qualify for income based scholarships.

          Also, take a close look at what it means to have money in the Oklahoma 529. Does this mean your nephew is limited to going to school in Oklahoma to use the funds? For some states, this is the case. So just be sure to read the fine print and truly know what you’re putting your money into.

          Thanks for reading!

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