When You Start Small, Saving is Easy

When Attiyya first got married, she and her Marine husband had just graduated from college and were focused on paying off student loan debt. They had both attended private schools and had sizeable loans. Then three months after the wedding, the couple found out they were pregnant with their first child.

The first year of their marriage, says Attiyya, was a balancing act between paying down debt and saving for the future.

As an accounting major with a love of numbers, Attiyya found herself curious about saving for retirement and started reading up on the topic. Her husband thought that a military pension would be enough, but she wasn’t so sure.

“Our priority was to be comfortable in retirement,” she says. But she also had competing priorities: her first daughter was followed by another child two years later and a third child two years after that.

They wanted to save for their children’s education, but they also had to save for their own retirement and pay down their student loan debt.

Attiyya heard about Coverdell Education Savings Accounts, a tax-advantaged way to save for college, and found out that she could contribute as little as $25 per month to the account.

She opened an account for her daughter and started contributing $25 via auto draft from her bank each month. When the other children came along, she opened accounts for them, too, and contributed to them automatically.

“If someone had told me I had to start out at $500 per month, that’s a tough start; I couldn’t have done it. But because I started small, when money became available, it was easy to increase the amount,” says Attiyya.

Eventually, the couple paid off their student loan debt. They opened 529 college savings plans for the kids and were able to up their contributions to their children’s’ accounts. And they did all this while still contributing to their retirement accounts.

She says she and her husband had to have some talks over the years, some discussions about what things they were prepared to give up to achieve their goals.

Now, some 18 years later, the couple is getting ready to send their oldest daughter to college this fall, and they can fully fund her education. They have savings lined up for the second child, and they plan on using GI Bill benefits for the third. Plus, their retirement plans are on track.

“That’s the beauty of compound interest – you say no to a few things, put the money away automatically. Then years later, the money is there and it gives you options. It’s a very calming place to be.”

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