Ouachita Stories

Chris Brune, Ph.D., CFP® is a professor of finance in the Hickingbotham School of Business, where he also serves as chair of the Department of Accounting and Finance and sponsors the Ary Student Investment Fund, managing millions of the university’s endowment. We recently sat down with Dr. Brune to hear his thoughts on questions that parents are asking — and what questions they should be asking about financial planning for college.

While you're here, learn more about Ouachita scholarships or look at a free budget worksheet provided by Dr. Brune.

Part 1 | Part 2 | Part 3 | Part 4

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If your children are still young, you have the one advantage money can't buy back: time. If your children are older, jump to part 4!

Dr. Brune explains why the habit matters more than the dollar amount. This is part 3 in a series on planning and paying for college.

Q: If a family’s kids are still young, how much do they really need to save each month?
A: Enough to build a habit they can actually keep — even if that’s $25 a month. There’s a common assumption that saving for college only counts if you can put away a few hundred dollars at a time, and that if you can’t, it’s not worth starting. That thinking is flawed.

The reason is time, which is the one resource you can’t buy back later. A family that sets aside a modest amount starting when a child is two or three often finishes ahead of one that waits until high school and scrambles to catch up. So if a small amount is what you can manage, start with the small amount. It may not cover four years of tuition on its own. But it can be the difference between a graduate with manageable debt and one carrying it for a decade.

QUICK DEFINITION: COMPOUND GROWTH
Money you invest earns returns, and then those returns earn returns of their own. So a dollar saved when your child is three has many more years to multiply than a dollar saved when they're sixteen.

Q: With college a decade or more away, how should that money be invested?
A: With ten or fifteen years before your child starts school, you can generally afford more risk than a family only five years out. That usually means a meaningful allocation to stocks early on, because there's time to absorb the market's ups and downs and still come out ahead.

As you get closer to that first tuition bill, ease off the risk. It works a lot like a target-date retirement fund, which shifts toward safer holdings on its own as the date approaches. You don't have to make the call all at once — just watch the calendar and adjust as you go.

QUICK DEFINITION: TARGET DATE FUND
A single investment that automatically becomes more conservative as a chosen date nears. It's a common option inside 529 plans — pick the year college starts, and the fund handles the shift from growth-focused to safer investments for you.

Q: Should families invite grandparents to contribute?
A: If grandparents are willing and able, I'd welcome it rather than feel like you have to handle everything alone. Most state 529 plans make it simple to contribute directly online, so birthday and holiday gifts can go into the account instead of another toy that's forgotten by February. Some families even match a grandparent's gift against what a child earns from small jobs, which builds a saving habit alongside the gift.

I'd frame it as an opportunity, not a transaction. A grandparent who gives toward a grandchild's education isn't just helping with a future bill. They're investing in a life, in a way that can shape far more than four years. Most grandparents, if they’re able to give, see it that way.

QUICK DEFINITION: AVERAGE NET PRICE
Sticker price is what you often see reported. Net price is the average out-of-pocket costs after subtracting aid, like scholarships, grants and work study. This is significantly less than the sticker price for most families. You can find university’s net price on websites like Niche.com and every school is required to have a net price calculator on their website. Do the work to find out what you actually need to be saving for.

Q: If you could leave a young family with one thing, what would it be?
A: You don't need a large sum to begin, and you don't need it all figured out today. Open the account, choose an amount you can sustain, and let time do quiet work in the background while you're busy with everything else raising a family requires. You set it aside, and you watch it grow. That's most of it.

Read earlier posts in this series about choosing a college savings account and how to talk about priorities from the start.

 

• Tags:
• College Planning