My wife and I have three kids and as a financial planner I am always running numbers and scenarios of what we need to accomplish our goals. Recently, I wanted to figure out what we would have to save in order to pay for our kids to go to college. First, we must fully fund our retirement needs then we can add to our daughter's college savings plan. This will give them a huge financial advantage to save for their own future. Here are the staggering results:Current average cost for in-state, public university: $17,100
Average national average college cost inflation: 6%
Year they start college: 2027 and 2031
Years in College: 4
Projected costs of college for each year:
2027: $40,891 (times 2)
2028: $43,440 (times 2)
2029: $46,046 (times 2)
2030: $48,809 (times 3)
2031: $51,738
2032: $54,842
2033: $58,133
The projected total cost of college for all three children is $525,848.
If we invest their college savings and earn 8% a year for the next 15 years, we will have to put away $1,509 a month in order to put them through college. That's like paying another mortgage each month!
So, if you would like to pay for all or a portion of your child's college costs, as with any other financial goal, the earlier you can start saving the better.
Average cost and inflation projections from: http://www.archimedes.com/vanguard/collcost.phtml
