Strategies for Savings Success

While college education is expensive, there are strategies you can use to help prepare for these impending costs.

Start Early

When saving for college, starting early can make a significant impact on savings. The chart below shows two new parents who want to save for college – Liz (the blue line) and John (the green line.) While Liz starts investing today, John procrastinates for 5 years. In this example, John ends up with 40% less money than Liz when his child is ready to start college. Starting early can make a difference.

Put Time on Your Side
Assumes an Annual Rate of Return of 7%

This is a hypothetical illustration to represent the effects of compounding assuming an annual rate of return of 7%. It does not reflect an actual investment, investment expenses, or any taxes payable upon withdrawal which would lower the amounts shown. Returns are not guaranteed and may be less than or greater than the amounts illustrated.


Invest Regularly

Making regular investments, even if they are small, can greatly increase how much money you have saved when it’s time for college. The chart below shows the difference between investing once when a child is born and investing $100 monthly over 18 years. In this example, investing regularly results in over $42,000 more in the same time period.

Franklin Templeton’s Automatic Investment Program (AIP) makes it easy to invest regularly.

Click here to learn more about enrolling.

Small and Consistent Investments Can Make a Difference


  • Contributions
  • Earnings

This is a hypothetical illustration to represent the effects of compounding assuming an annual rate of return of 7%. It does not reflect an actual investment, investment expenses, or any taxes payable upon withdrawal which would lower the amounts shown. A periodic investment does not assure a profit or protect against a loss in declining markets. Returns are not guaranteed and may be less than or greater than the amounts illustrated. A periodic investment plan such as dollar-cost averaging does not ensure a profit or protect against a loss in declining markets. Such a plan involves continuous investment in securities regardless of fluctuating price levels; investors should carefully consider their financial ability to continue their purchases through periods of fluctuating price levels.


Ask Friends and Family

Friends and family want to help. Franklin Templeton makes it simple. Spryng, our exclusive crowdfunding tool, makes it easy for friends and family to contribute to your savings goals.

Learn more about Spryng


Educate Yourself

Take time to review which options are available and which ones offer the most advantages for your situation.

Comparing College Investing Vehicles


Franklin Templeton 529 College Savings Plan1Coverdell Education Savings
Account1
UGMA/UTMATaxable InvestmentsSavings Accounts
Federal Income Tax-Free Savings 2,3 3
Federal Income Tax-Free Qualified Withdrawals
Possible State Tax-Free Benefits
High or No Contribution Limit
No Income Restriction 4,5
Plan Owner Retains Control of Account 6
Use for Primary and Secondary (K12) Education
Ability to Change Beneficiary
Early or Nonqualified Withdrawals with Penalties

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