I gave my daughter a similar scenario, but of course it was her choice - synchro fund or college fund. She picked synchro, competed at the national level, and that was what got her into her dream college (or so she says). Luckily, we got a very nice financial need scholarship from the college.
My daughter never competed at the lower levels (well, one LTS club comp) as she was busy testing up to compete in synchro. She also, because teams folded, only competed for four years, and only two were consecutive.
At lower levels, would it be possible to pick one or two competitions - maybe one smaller local one, and one bigger, fancier one, for the experience? If that's too expensive, how about doing a small one one year, and then a big one the next? I think doing at least one competition a year would be a good idea, so that the skater gets the nerve/focus/training issues under control before the comps get bigger and more intense.