Why children should be involved in saving for their college starting today?
25% of children that start high school do not graduate.
30% of high school graduates do not go right on to college.
43% of students who start college will not graduate in 6 years.[i]
The reasons why American children are unsuccessful in our education system is multi-faceted and I would not begin to claim I have or can research all the answers to this question. But I can state without a doubt that setting goals and doing something every day to keep that goal real and tangible makes a difference. If college is a daily conversation, a daily event then our high school graduation rates will increase, the percent of kids who go on to college will increase and more young adults will graduate successfully.
Having the financial ability for college is the first hurdle students and parents face. The second is based on character. A young adult has to have the drive and tenacity to work for four or more years while sacrificing both financially and socially. This focus does not happen the day they graduate from high school—it is developed over time.
The Science Behind the Theory
Creating a habit of success:
Five dollars a day saved towards college, and investment in the future can make a child’s future more tangible since everyday is a day participating in the goal. With each day, the habit of saving and earning their own way to their dreams is recorded in their brain. This learned behavior will not only make college a more likely success but will also be applied to many things in life both now and in the future.
New neural patterns begin to form in the brain through repetition. It takes approximately 4-6 weeks to form a new habit. So doing something everyday towards a goal, not only helps the child succeed but it programs in the very factors that make success a habit. Once successfully programmed these behaviors run on auto-pilot. It is scientifically proven that long-term memory is never erased in a healthy mind. So this gift of saving five dollars a day provides your child a lifelong gift that will become more than just funds for a college education but a behavioral foundation for success in life.
Reward System and Positive Feedback:
Our memories are programmed in a rich, multi sensory recordings. Each experience has tags of sight, sound, smell, touch and emotional imprint. The positive emotion, the sight of your smiling face helping with five dollars day, the positive words shared together on this project will not only build a nest egg for college but also enhance the foundation of a positive self-image. When you show you believe, your child’s belief grows as well.
The Financial Reward of $5.00 per day:
So how does five dollars a day pay for college? Here is the math:
Child’s age at beginning: 5 years old
Child’s age for first year of college: 18 years old
Interest rate: I assumed an economy that was progressively improving and investment vehicles that delivered higher return as the years progressed through a 13 year term. Interest is paid at the end of each month.
- For the first three years of saving I used 3%
- For the following three years I used 5%
- For the last seven years I used 8%
Frequency of deposits into college account: Every 30 days
Following this plan your child would have $67,349.33 saved for college at the end of the term[ii]. The average tuition for public college in 2012 was approximately $8,655.00[iii].
For the same cost of that gourmet coffee you drink every day, you and your child can build a path to college and more importantly, build a habit of saving and investing in the future. Why not make this a family project? Start build her/his path to a college education today.