Unbiased Financial Information Provided by Financial Wisdom.
The costs of sending a child or a grandchild to college are high and getting higher. Actual costs vary by school, but a general place to begin is to consider that today’s tuition, room, board, books, transportation, and incidentals will probably run:
- Private 4-year University – $45,000
- Public 4-year University for in-state students – $23,000
- Public 4-year University for out-of-state students – $36,000
The rate of college costs increases has been higher than inflation, 5% to 8% for the past several years. If we assume just a 5% annual cost increase, the cost of a child’s first year of college will be:
Save early and often
Even considering that the child may qualify for a scholarship or that you may have already started saving, the costs shown above can be frightening. They only represent the first year. When you consider that most students will attend college for four years and maybe graduate school beyond that, the need to save more is obvious.
Here is a chart showing how much you should save monthly to completely fund four years’ of college for children of different ages. The chart assumes you want to have accumulated all the funds needed before the student starts college.
Start Your Automatic Savings Today
There is no easier way to save than with an automatic savings plan. If you are already using direct deposit for your paycheck, have your financial institution transfer the amount each month. You can also have your employer deduct the amount each month and deposit into the account of your choice.