Three college savings lessons I learned from my mother

This Mother’s Day, I’m sharing some of my mom’s most valuable financial advice

Three college savings lessons I learned from my mother

Time to read: 3 min

Sunday, May 13 is Mother’s Day. At this time of year, I think fondly of my own mom and the enduring lessons she taught me. Her words of wisdom were a guide through many of the most important stages of my life, including the college savings journey — both for myself and for my own children. In the spirit of the holiday, here are three of the most valuable financial lessons I learned from my mother:

1. Savings should be out of sight, out of mind.

When I was a young grade school student, my parents opened a savings account just for me. I still remember holding that bank deposit book in my hand and realizing the power of savings as they grew over time — it was so exciting! Throughout my childhood, my mother and I visited the bank to deposit birthday checks and graduation money, and I watched that bank balance continue to grow.

It was a special tradition between us, but it was also an excellent lesson in financial responsibility. I wasn’t just learning how interest rates and compound savings worked; I was learning that those savings were there for a reason, and I couldn’t use them for any old expense. Had they been sitting in a piggy bank in my room, I would have been sorely tempted to dip into those funds for an occasional splurge — but keeping them in a savings account kept them largely “out of sight, out of mind,” and that helped maximize their growth over time.

The same principle applies to college savings. Some families rely on a standard savings account to save for their kids’ higher education — but when the same pool of funds is used to finance multiple long-term goals (from college and retirement savings to home repairs and medical expenses), it’s harder to make sure savings are growing as intended.

A 529 college savings plan offers a dedicated account where earnings grow tax-deferred and are tax-free when used for qualified distributions.1 It’s an excellent way to enjoy the potential benefits of compound savings and ensure those funds go toward their intended goal.

2. Start saving early.

Before I made a big purchase, my mother taught me to ask myself, “Is this something I need?” Sometimes, I had to admit that no, I really didn’t need that trendy piece of clothing or expensive collectible after all. But other times, the answer was a resounding yes. Cars, homes, higher education — these are the kinds of big purchases that are worth the money in the long run. My mother encouraged me to budget for these expenses far in advance, so that I didn’t need to rely as much on loans.

Take college savings — the earlier you start to set aside funds, the more you’ll have when it’s time to use them. And every dollar you save is a dollar that your children don’t have to borrow — and pay interest on for years. This is why I always encourage people to open a 529 account for a loved one as early as possible; by starting early, you’ll maximize your ability to meet your goals without racking up debt.

3. Money doesn’t buy happiness.

Perhaps the most valuable financial lesson I learned from my mother is this: A well-balanced life is built on far more than just money. What does this mean for college savers? Over the years, markets will go up and down, and it can be all too easy to get stressed out by the fluctuations. But if you let emotions drive your decision-making, it can lead you to pull money out of the markets when they fall (locking in your losses), or take too much risk in bull markets because you’re swept up in the excitement of gains.

Sticking to a long-term plan that’s based on sound financial principles — not emotions — can help you let go of the stress that comes from trying to make daily decisions based on the ups and downs of the markets. Working with a financial advisor can help you keep your eyes on the long-term goal and allow you to enjoy this special time with your kids, with less stress.

Today, I’m grateful for all the things I learned from my mother, especially the financial guidance that helped me along the college savings journey for myself and for my own kids. Thanks, Mom!

For additional information on 529 plans, visit

1 Earnings on non-qualified withdrawals may be subject to federal income tax and a 10% federal penalty tax, as well as state and local income taxes. Tax and other benefits are contingent on meeting other requirements and certain withdrawals are subject to federal, state, and local taxes.

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Thomas Rowley

Director, Retirement and Education Strategies

Thomas Rowley is director of retirement and education strategies and one of Invesco’s most frequently requested speakers. He provides analysis of the evolving retirement landscape and develops actionable strategies to help investors and financial advisors maximize their retirement-planning opportunities. Mr. Rowley regularly shares his insights online at in addition to his speaking engagements.

Mr. Rowley’s insights reflect more than 20 years of experience in the investment industry. He translates his comprehensive knowledge of retirement planning into lively, clear explanations of the complexities of legislative, investing, tax and social issues.

Mr. Rowley shares his analyses of retirement-related issues through regular personal appearances, continuing education webinars and Web-based commentaries.

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