Breadcrumb Learn / College / Article 4 min read Saving for College Parents: Start Saving for College with a 529 PlanIf you have young children, college might feel far away, but now is actually the perfect time to start planning. The average cost of college for in-state Virginia undergrads in 2024-2025 was $28,640, and that number continues to rise. Starting early, even with small amounts, can make a real difference. That’s because your money has time to grow. Small, consistent contributions can add up year after year, helping you feel more prepared when it’s finally time to start college shopping.If you set aside $60 a month from the time your child is born, and your account earns a 5% average annual return, your savings could grow to more than $20,000 by the time they turn 18.This is the power of compound interest. Your money earns interest, and then that interest earns interest. Your balance grows faster over time without you doing anything extra. It’s one of the biggest reasons starting early matters. What Is a 529 College Savings Plan?A 529 plan is a savings account with tax advantages made specifically for education expenses. Your contributions grow tax-free, and withdrawals are tax-free when used for qualified education costs. Qualified costs include tuition, fees, textbooks, required supplies, computers and equipment, room and board, and special needs services.New rules as of July 2025 allow 529 funds to also be used for K-12 expenses, apprenticeships, and some student loan repayment, making it more flexible than before. You can learn more about what expenses are covered at Invest529, Virginia’s official 529 program.There are two main types of 529 plans:College savings plans (the most common). Contributions go into simple, pre-set investment options, usually a mix of stocks and bonds, that automatically become more conservative as your child gets older. Your savings have the chance to grow without you having to manage the investing.Prepaid tuition plans. These let you lock in today’s tuition rates at certain schools.A 529 plan is also flexible. Funds can be used at colleges, universities, technical/vocational schools, training programs, and apprenticeships. If your child doesn’t go to college, you can transfer the money to another family member.Starting early, even with small monthly contributions, gives your savings time to grow and could make future college costs more manageable.An Alternative: Savings CertificatesSavings certificates offer a low-risk way to save with a fixed interest rate over a set period of time. Unlike 529 plans, which are designed specifically for education expenses, savings certificates provide flexibility. Funds can be used for any purpose, whether that’s education, a gap year, trade school, or another financial goal altogether. Dig in: What is a savings certificate? For families who value predictable returns, or who are unsure how future education plans may evolve, savings certificates can be an attractive alternative or complement to a 529 plan.How to Get StartedThe most important step is simply opening an account.In Virginia, you can explore 529 plans through Invest529, the state’s official program. With multiple 529 portfolio options available, it can be helpful to work with a financial planner to determine which plan best fits your family’s goals.If you’re already a VACU member, you can open a savings certificate through online banking. If you have more questions, you can give us a call or visit a branch to get started.There’s no perfect plan from day one. Your goals, budget, and even your child’s path may change over time. You can adjust contributions, switch investment options, or add other tools as your needs evolve.Once your account is set up, consider automating contributions. Even $10–$25 a month adds up. You can also direct birthday or holiday gifts toward the account. Start small. As your income grows, your savings can grow with you. Last Updated: December 22, 2025 College Families Investing Saving You may also like See all Article 1 min Reducing College Costs College