Children’s Education and Personal Finance

Almost every time I read an article about funding your child’s education, it turns into a discussion about saving for college. Coverdell plans, 529 plans, how to handle the FAFSA – all of this stuff is standard personal finance fare. But all of it overlooks the first eighteen years of your child’s life – the period in which most of their education and learning will actually occur.

I watch my two year old right now and I see him learning all the time and building skills for the future. I have nieces and nephews ranging from age six to age fifteen and they’re all learning all kinds of things. Every single one of these children would benefit from some extra emphasis on their education right now.

Things to Consider Regarding Your Child’s Education

Overlooked Opportunities

There are countless opportunities to improve your child’s education and growth right now instead of further down the road. Here are some ways you can invest immediately in your child – figure out ones that work for you and try them.

High-Quality Day Care and Preschool

Put $20 less a week into college savings and instead get your child into a better child care opportunity. Paying for a preschool that can give your child educational growth opportunities is well worth the extra cash you put in.

The question of daycare or no daycare is one I’ve covered before. Some parents may find it better for one of them to stay at home with the children, at least until they’re in school – it depends on your situation. Either way, a top-notch preschool or great day care or a parent staying at home are all expensive.

Private School

When your child enters school, most likely you’ll send them to the local public school without skipping a beat, but you might want to consider rerouting some of that educational savings into the cost of private school. Private school is an issue I’ve discussed before as well – my take on it is that it depends wholly on the quality of the district you live in.

I’m lucky to live in one of the best school districts in one of the best educational states in the country – I live in Iowa and found out about the quality of my local district at Thus, the benefit my child would get from private school versus public school is much less than the benefit that would be found by a student in a poor public school district.

If your choice is between putting your child in a poor public school district and saving $8,000 a year for college, or paying $8,000 a year for private school tuition, you might want to strongly consider the latter. It will set your child up to succeed later on with better test scores and a stronger education before they even get to their standardized tests.

Educational Opportunities

Several times during my school years, I had opportunities for educational growth that I was unable to take advantage of because of the cost. There would be $200 or $500 or $1,000 fees involved and my parents were simply unable to help with those costs, and so I missed out on things like taking advanced coursework, traveling around my state to speak, helping with at least two large national conventions, and other opportunities. Perhaps most painfully, I missed out on an opportunity to participate in a summer program at a technical institute in Germany for advanced math students – I really wanted to go to this and even applied without my parents’ permission, but there simply wasn’t enough money. I still remember throwing away that acceptance letter without telling anyone about it.

Having the money available to give your children great educational opportunities, especially in junior high and high school, can transform a good student into a great one, fueling their passions and letting them explore the world.


I’ve found that the opportunity to travel has taught me so much about the world – and so much about myself. Even just traveling within America, I’ve witnessed an incredible amount of diversity: different lifestyles, different foods, different cultures, different people, and so on. When you go international, your mind spreads even further and you begin to realize how much diversity and how many opportunities there really are out there.

My childhood never exposed me to such diversity, unfortunately, and that caused a pretty steep learning curve when it came to interacting with and understanding people from different cultures later on in life. Luckily, I had a number of friends from different cultures who were very understanding, particularly a group of Chinese students who “got” that I was just clueless, not hurtful, and if I said something completely wrong, it was borne of misunderstanding.

I’d rather my children be exposed to the diversity of the world much earlier than that, and to do that we’re going to travel significantly in the future. I plan on lengthy trips to international locations, particularly with the goal of spending most of the time off of the beaten path.

Exploration of Interests

When I was in school, there was one child that was oozing with natural musical talent. He’d do stuff like drum out complex rhythms with his finger on the table, he could sing quite well, and during music class, he intuitively began to pick up the piano in just a few minutes. When he was asked to join the band, however, he declined. Why? I later found out it was because he knew his parents couldn’t afford the instrument.

That’s not a situation that I’m ever going to allow my child to have to live through. There will be money for them to explore their interests, whether it’s music or physics or chemistry or engineering. If they start showing passion for something and growing in that direction, we will support that growth.

Benefits of an Earlier Emphasis on Educational Spending

All of the above are educational costs that sometimes get overlooked in the rush to save for college, but they can all set the table for your child to do very well academically and personally. Here are a few benefits of pointing at least some of your educational savings in the direction of helping them grow earlier on.

are the direct result of many positive childhood factors: travel, music, a better school, and a better preschool all contribute directly to improved test scores later on. Those test scores can help your child win scholarships, get into a better school, and line things up so that they can chase their dreams.

Improved problem-solving skills and self-reliance are also the result of good activities, particularly those that are self-directed. Educational opportunities where your child can take the lead and really get excited are worth their weight in gold – not only do they learn material, but they learn life skills, too.

Discovery of passions and interests early can also help the child figure out what they want to do with their life so they don’t make bad (read: expensive) educational choices in college. Going into college without a clue about what you’re doing has a huge cost – it can tack years onto the college experience and can often result in people being unhappy with their careers and going back to school. Helping your child discover their passions earlier on can really help, and you can only do that by fueling their interests and personal growth.

Think Different: Start a Separate Education Fund

My wife and I have a solution to this problem. We’re starting a separate “education fund” for each of our children and putting a bit each month into this fund, almost as much as we’re putting into their college 529s. Later on, when opportunities for them come up, we’ll use this money to pay for it – they’ll never lack in terms of being able to take an educational trip or explore a new area of intellectual interest.

We view this as an investment in them, just as a college savings plan is, but it’s one that will bear fruit sooner and it’s one that we’ll use throughout their childhood, not just when they’re leaving the nest. In the end, we believe this strategy will help them become better adults than just funding their college education will be.

What kind of investment?

For now, the fund is merely a savings account for each of them. Eventually, we may consider other investments, but they’re likely to be rather conservative – the riskiest move we would make would be to buy a broad-based index fund.

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