I (Finally) Started Saving for My Kids’ Educations. What Was Stopping Me?

My daughter and I have stared at “last day school” scrawled on her calendar since she started kindergarten in August.

I liked seeing her newly attained penmanship crammed into a tiny date box. She liked marking the end of wearing her school uniform.

Turns out, the inked words made the future tangible for us both.

The milestone helped me get serious about saving for college. And so, during her last week of school, I opened a 529 college savings account for her and her younger brother.

Listen, I know that one of the keys to investing, especially when saving for something as expensive as higher education, is to start early. I work at Morningstar. I’ve been reading and editing articles about these powerful college savings tools for nine years. (Imagine having to admit you didn’t open one upon the birth of your firstborn to a bunch of people who research, evaluate, and rate these savings strategies for a living.)

What was my holdup?

Inertia certainly played a role. Sleep deprivation did, too. I also thought it would take longer and be a trickier process. And, like with the whiff of a dirty diaper, my husband and I had exchanged many back-and-forth remarks about who would do this job.

Impediments aside, I knew that postponing a 529 account any longer would really squeeze our dollars in the years ahead. The delay had already cost us six years of double-digit annual returns in an unusually robust stock market.

I share this lesson knowing it can be helpful to others when you spill your biggest financial mistakes or make similar cathartic confessions.

There are many pitfalls to parenting—and investing. One of them is that you think you have more time. The future feels far when you’re in the thick of caring for children. And then, like the last day of school, it arrives.

So, here’s what eventually made opening a 529 savings account doable for me.

I had these realizations:

• I knew where the kids’ Social Security cards were. That’s all the paperwork I needed.
• One colleague, a father of three, said I could open their accounts in five minutes. A part of me wanted to prove to him it would take longer; it was closer to 15 minutes. (So there, Jerry!)
• Like many things in parenting, it didn’t need to be perfect—it just needed to be done.
• I can make changes later. The goal was to get started.
• My kids don’t have to go to college; we could still use this money in other ways, like retirement.
• The tax benefits made it worthwhile.
• With my son, we got $50 in seed money to open his 529 account. I wasn’t going to pass that up.
• Because of their increased flexibility, we probably needed 529 accounts.

I asked Samantha Lamas, a senior behavioral insights researcher at Morningstar, what she thought about my experience. She noted that some of my realizations were actually “behavioral interventions” that can help investors get unstuck on a goal—like creating a fresh start (the end of kindergarten), reframing and breaking down the problem (just get started), and incentives (free money), along with social pressures (thanks, Jerry) and voicing that you will do something.

“It took a handful of behavioral interventions to get you out of the slump, but you got out!” Lamas told me, encouragingly.

It’s OK to acknowledge that things can easily fall off the financial to-do list. Opening a 529 account dropped off mine for nearly six years. This applies to other areas, too. It’s common for people to put off contributing to a 401(k) plan, and that’s what has made auto-enrollment so effective. Just because you feel behind doesn’t mean you can’t get going.

Now, I guess I should scrawl in date boxes of my own and tackle these other financial pain points.