The morning after my husband, Tom, and I learned that I was pregnant, I found him quietly tapping and clicking on his laptop. If I weren’t already sure that we were a match made in personal finance heaven, that moment would have confirmed it: He was looking up projected college costs a couple of decades down the road.
A year later, we’re getting serious about socking away money for our son’s future education expenses. It’s a daunting prospect. In 18 years, attending an in-state public school for four years will cost about $233,000, assuming 5% yearly inflation in average college costs, according to the College Board’s College Savings Calculator; a private college will run $528,000 (https://bigfuture.collegeboard.org/ pay-for-college/tools-calculators). Plenty could happen before 2037 to reduce the price of a college degree, but I’m not counting on it.
How much to save. A common guideline is to save about one-third of your child’s expected college expenses and cover the rest with loans, financial aid and current income while the child is in college, says Mark Kantrowitz, publisher and vice president of research at Savingforcollege.com. That means we’d have to save anywhere from $78,000 for a four-year, in-state public school to $176,000 for a private college.
This story is from the May 2019 edition of Kiplinger's Personal Finance.
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This story is from the May 2019 edition of Kiplinger's Personal Finance.
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