Saving money as early as possible is definitely a positive and beneficial attitude to have but sometimes, it may be better to start a little later.

Coming from a lower class income family with a household income of about $23,000 and two adults and two college children, paying for school wouldn't be easy (virtually impossible) without the help of financial aid.

During the spring, before every undergraduate school year, we must file a FAFSA form and the government compiles all relevant financial data and provides us with a number for my EFC (Estimated Family Contribution). The higher that number is, the more you'll have to pay out of your own pockets. So, we strive for the lowest EFC possible. A mere $500 in your bank account can make a big difference in this number.

If a hard working 13-year-old worked five years to save up $4000 in any bank account. The amound of financial aid that he receives would decrease dramatically. When applying for financial aid, personal assets have a larger effect on what you receive compared to parental assets. When I swiped my debit card for a few hundred bucks, I revised the application (which they allow you to do) and the EFC fell drastically.

This year, I will be filing my application for the last time as an undergrad while I just started getting serious about saving money. All the money in my brokerage, savings and checking accounts would have to be reported. What I have now is substantially more than what I had at the same time last year.

Fortunately, an individual retirement account is not a factor in the financial aid equation and that is great news since I was about to open a Roth IRA soon, after I find the right place to open it.

So, I've decided to cease depositing money into bank accounts (or take some out?). I'll resume after filing the application.

For those in families with low incomes desperately in need the financial aid and still in your early years of college, I suggest not putting to much into a bank account. Instead, open a Roth IRA.


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