As a mom, it’s natural to want the best for your children, and that includes providing them with a quality education. However, the cost of college can be overwhelming. The cost of an average 4-year college degree can vary significantly depending on various factors such as the type of institution (public or private), location, residency status, and whether the student attends full-time or part-time. Additionally, costs may differ based on whether your child lives on-campus or off-campus.
According to data from the College Board, the average published tuition and fees for the 2020-2021 academic year were approximately $10,560 for in-state students at public four-year colleges and $37,650 for out-of-state students. For private non-profit four-year colleges, the average published tuition and fees were around $37,650. The average cost of living expenses, such as room and board, food, textbook and supplies etc., were $16,000 – $30,000 per year and this can be higher depending on location. To get a more accurate estimate of the cost, it’s recommended to research specific colleges and universities of interest and review their published tuition and fees, as well as the cost of living in the area.
Here are some tips to help you save for your children’s college education:
- Start early: The earlier you start saving for your child’s college education, the more time your money has to grow and the less financial burden you or your child will have to take on if they go to college. Consider setting up a 529 college savings plan, which offers tax advantages and allows you to save for college over time. Learn more about 529 plans and other custodian accounts in our investing section.
- Set a goal: Determine how much you’ll need to save to cover your child’s college expenses. Consider factors like tuition, fees, room and board, and any other expenses your child may incur while in college.
- Prioritize your savings: Once you have a savings goal in mind, prioritize your savings to meet that goal. Consider setting up automatic deposits into your college savings account or creating a separate savings account specifically for college savings.
- Get creative with your savings: Consider alternative ways to save for college, such as applying for scholarships, applying for financial aid, or exploring work-study programs. It should be noted that very few students receive any type of financial aid or qualify for scholarships, apply for them but don’t rely on them.
- Involve your child in the process: Encourage your child to take an active role in planning for their college education. Teach them about the importance of saving and budgeting, and involve them in discussions about college expenses and funding options.
- Seek professional advice: Consider consulting with a financial advisor who can help you create a comprehensive college savings plan that meets your financial goals and fits your family’s budget.
To reach a goal of $100,000 over 15 years with an average annual return of 5%, you should save approximately $372.71 per month. To reach $200,000 with a 5% annual return you would need to save $745.43. It’s important to remember that these calculations assume consistent monthly savings and a constant 5% annual return. Actual investment returns can vary, and it’s advisable to review and adjust your savings plan as needed.
Saving for college can be challenging, but by starting early, setting a savings goal, and prioritizing your savings, you can build a solid college savings plan for your child’s future. Consider getting creative with your savings, involving your child in the process, and seeking professional advice to ensure that you’re on track to meet your savings goals. With these tips, you can take control of your family’s financial future and provide your child with the education they deserve.
