Saving for Your Child’s Future: From Piggy Banks to College Funds

Every parent wants to give their child the best possible start in life—and that often means setting them up for financial success. Whether you're dreaming of helping with college tuition, a first car, or simply teaching lifelong money habits, saving early and consistently can make a big difference.

Here’s a breakdown of smart strategies for saving for your child’s future, from the basics to more advanced tools.

Start Small: Build Good Habits Early

Even if college or major expenses feel far away, it’s never too early to start saving. Setting aside even a small amount each month can add up over time—and the earlier you begin, the more you benefit from compound interest.

A simple savings account or a piggy bank can be a great first step for younger children. It not only gives them a safe place to stash birthday money or allowance, but also introduces basic money skills.

529 College Savings Plans

For long-term savings with a specific goal—like college—a 529 plan is a powerful tool. These tax-advantaged accounts are designed to help families save for education expenses.

Benefits of a 529 plan include:

• Tax-free growth on earnings

• Tax-free withdrawals when used for qualified education expenses

• High contribution limits (varies by state)

• Flexibility: funds can be used for tuition, books, room and board, and even K-12 education or student loan repayment

Most states offer their own 529 plans, and you don’t have to choose the one where you live. It’s worth comparing investment options, fees, and any state tax deductions available.

Custodial Accounts (UTMA/UGMA)

A custodial account under the Uniform Transfers to Minors Act (UTMA) or Uniform Gifts to Minors Act (UGMA) allows you to save and invest on behalf of a child. These accounts are more flexible than 529 plans—they’re not limited to education expenses.

However, there are a few important considerations:

• The funds become the child’s property once they reach the age of majority (usually 18 or 21, depending on the state)

• There may be tax implications if the account generates income

• Assets in the account could impact financial aid eligibility

Custodial accounts can be a great option for general savings goals, like helping a child buy a car, start a business, or travel after high school.

Teaching Kids About Money Along the Way

Saving for your child’s future is about more than dollars and cents—it’s also an opportunity to teach them about money management and financial responsibility. Here are a few ways to instill good habits early:

• Talk openly about money in age-appropriate ways

• Use allowance as a learning tool: encourage saving, spending, and giving

• Set savings goals together, like saving for a toy or game

• Show them how saving grows, especially if you open a savings account in their name

• Lead by example with your own money habits

These lessons can build confidence and help your child make thoughtful financial decisions later in life.

Every Dollar Counts

You don’t need to have all the answers or contribute thousands each year to make a meaningful impact. What matters most is being intentional—setting a goal, choosing the right tools, and taking consistent steps toward it.

If you're not sure where to begin or how to choose the best option for your family, consider reaching out to your financial advisor for personalized guidance based on your goals and timeline.

Saving for your child’s future is a gift that keeps on giving—through college, adulthood, and beyond. Whether it starts with a piggy bank or a 529 plan, the steps you take today can open doors for tomorrow.

*The fees, expenses, and features of 529 plans can vary from state to state. 529 plans involve investment risk, including the possible loss of funds. There is no guarantee that an education-funding goal will be met. In order to be federally tax free, earnings must be used to pay for qualified education expenses. The earnings portion of a nonqualified withdrawal will be subject to ordinary income tax at the recipient’s marginal rate and subject to a 10 percent penalty. By investing in a plan outside your state of residence, you may lose any state tax benefits. 529 plans are subject to enrollment, maintenance, and administration/management fees and expenses.