This information is provided by our friends at Pentagon Federal Credit Union (PenFed). 

Every day a young family is presented with new financial priorities: a bigger car seat, entirely new winter wardrobes in larger sizes for each child, another doctor’s visit, and another $10 check to the PTA for the latest school event. Sure, parents realize that saving for college is an important goal — but how can it compare to the barrage of everyday priorities parents face every single day?

While day-to-day priorities may seem to take obvious financial precedence over something as long-range as saving for college, consider this: Long-term saving may be the only way you will realistically accumulate the kind of money it will take to put a child through college.

Projections from J.P. Morgan Asset Management show the total costs to attend college are increasing at 5 percent per year. That will leave parents of a child heading into classes in 2030 with a bill nearly double of today’s costs — $90,000 a year for an education that cost $40,000 a year in 2013, or $41,000 per year for a public university education that cost about $18,000 per year in 2013. That’s not the kind of money most families can save up over a few years once the kids have gotten a little older.

The sooner you start your kids’ college funds and the longer you can allow that money to grow, the more you’ll have on hand to face spiraling tuition costs.

It takes a village 

The beauty of a Coverdell educational savings certificate is literally anyone can set one up for your child. Grandparents, aunts and uncles, and even friends of the family can make this happen. What’s more, Coverdell savings can be used for elementary and secondary school expenses as well as college tuition, so that money might turn out to be useful sooner rather than later. Relatives and family friends love being able to help young families in a meaningful way, and a Coverdell is the perfect opportunity.

The trick here is to watch out for the overall annual contribution limit. The $2,000 per child annual limit applies to contributions across as many accounts as exist for your child. That means if Aunt Tracy has already set up a Coverdell for your firstborn and socked away $1,500 this year, that leaves only $500 for anyone else to contribute (until next year, anyway).

The earlier you set up a Coverdell for your child, the longer you’ll be able to let that money grow — and the longer you can leave that investment to grow, the higher the interest rate you’ll earn. An early start is a smart start. Get started with a PenFed Coverdell to start building something of lifelong value.

Find more financial education articles like this one on PenFed’s blog.