no college savings in your 40's

No College Savings in Your 40’s {Start Saving Today}

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no college savings

No college savings in your 40’s?  If your son’s voice is dropping, and your daughter is nearly taller than you, it’s time to step up your game! There’s no need to dwell on past mistakes or to feel depressed about the fact that you have nothing saved for your kids’ college. Forgive yourself and commit to making changes immediately! Before we get started, I want to let you know I’ve created a free printable SMART goals worksheet to help you keep track of your own personal finance goals. You can find it at the bottom of this post.

Click here to watch the video if you’re short on time 🙂 Don’t forget to subscribe to my YouTube channel for more practical money tips for the free-spirited nerd!

What you can do if you have No College Savings in your 40’s


no college savings

So how do you start saving for college when you’re struggling financially? Maybe you’re struggling to pay off debt and haven’t even thought about saving money for your kids’ college. Having no college savings in your 40’s probably isn’t something you thought you’d be discussing. When you had your first child, you more than likely had a grand thought of saving a certain amount of money for college every month so that you wouldn’t have to worry when he graduated from high school.

But then life happened.

You had another baby. You got laid off from your job. You traded in 10 cars in a row, financing the negative equity into each new loan, which resulted in being massively upside-down and stuck in a car that was just too expensive. Or maybe you’re a free-spirited nerd like me…someone who knows what they need to do but they have a compulsive tendency to overspend on things that have nothing to do with your financial goals. Whatever your reason for having no college savings in your 40’s doesn’t really matter. You are here, which means you’re committed to making changes to start your kiddo off on the right foot! That’s what matters!

no college savings in your 40's

college savings accounts

You can save for college many different ways, even as simple as a regular savings account at your local bank or credit union. But I wouldn’t recommend that. Even though it may be tempting to start saving money in your savings account at the bank, you’ll pay taxes on the dividends (interest earned) in a regular savings account…even if it’s earmarked as the kids’ college fund. There are two types of college savings accounts that are better because your money grows tax-deferred.

The 529 Plan

A 529 plan allows you grow your savings on behalf of a beneficiary (your child, or children). A 529 plan may be established by anyone, including non-relatives, for a designated beneficiary. There is no limit on the number of 529 plans an individual can set up, but contributions should not exceed the cost of education nor the limit as set by the state. So if a plan has more than one contributor, these contributors should inform each other of their contributions to ensure they don’t exceed the limits.

The money in the plan belongs to you, not your child. The beneficiary has no claim on the assets, which can be withdrawn by the holder for any reason at any time, with penalties. A plan can be transferred to a member of the beneficiary’s family, or excess funds can be rolled over into a family member’s plan. So in other words, if child #1 decides to not go to college, you can transfer the funds to another one of your kiddos. Neither action triggers a penalty or taxes. Although the beneficiary does not control the funds, they may affect his or her financial aid eligibility to a significant degree.

I’m not a huge fan of the 529 plan due to the fact that it’s reportable on the FAFSA and can disqualify someone from grant eligibility who, otherwise, may have qualified. If you have no college savings, though, and feel more comfortable saving in a 529 plan, talk to your banker right away about your options.


Unlike 529 plans, which can only be used for college expenses, the Roth IRA is an investment vehicle that has multiple uses. A Roth IRA can be used for college or retirement! While there is no tax deduction for the Roth, the interest earned is growing tax-deferred!

You can withdraw from your Roth IRA’s principal balance (not the earnings) to pay for college with no penalties (with a few limitations). Withdrawals are treated as a “return of contribution” first and as earnings second. So someone who has been contributing $5,000 per year for the past five years can withdraw $25,000 tax-free, as long as the proceeds are used for qualified educational expenses. (Any withdrawals that exceed the total of one’s contributions and are attributable to earnings will be taxable for those under age 59½.

The goal is to just start saving. Period. We can’t rely on the FAFSA or other grants and financial aid. They just aren’t guaranteed…even if you have no college savings for your kids. If you’re living paycheck to paycheck and struggling with debt, start here, and if you need a little help with your household budget, I can create a personalized budget, tailored to your specific needs!

If you’re looking for other practical money tips and want to listen to/watch YouTube videos on the go, be sure to subscribe to my YouTube Channel!

9 thoughts on “No College Savings in Your 40’s {Start Saving Today}”

  1. Pingback: How to Start a Blog - Plus How I Make Money Blogging | Perfection Hangover

  2. This is so timely and encouraging! I have two teenagers who will be in college in a few years and I just started saving for their college in the last few years. Better late than never!

  3. Oh my mom went back to college when I was just out of high school, we actually both went to community college together and she got her bachelors from UW thanks to all the money she saved from going to cc.

    1. Yes ma’am! It’s amazing how much cheaper it is to go to a junior college or community college! Here in Illinois, our local CC is only about $5000 per year in tuition and books! So worth it to get the first two years done on a budget. Besides..unless you’re going to an Ivy League school, I don’t think it really matters where the piece of paper says it came from, as long as it’s an accredited school. 😉

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