My nephew is starting college next year. He has grown up so quickly. It seems like just yesterday that I was standing in the hospital holding him for the first time. It really is amazing how fast time goes by. I think my sister and brother in law are also amazed at how quickly time has gone by. During the holidays, we were talking and they were going over how they were planning on paying for his college. It’s going to take a lot of cash to pay for his tuition and living expenses. Luckily they both have good jobs and have enough cash flow that they should be able to pay the majority of it. I know this won’t be easy and they’ll definitely have to sacrifice some other things to pull it off but luckily they have the option to pay cash as needed.
As I was listening to them talk about the impact it was going to have on their budget, I was also thinking about how glad I am that we started saving for our daughter’s college early. While we didn’t start right when she was born, we did get going on it within the first couple years of her birth. To help make up for those first couple years, we’ve tried to boost how much we put in her account each month to catch up. If all goes well, we should have between 75% and 100% of the cost saved up for her in a 529 college savings plan (We are using the Ohio College Advantage program).
If you have a child, there is no time for delay. (And if you have multiple kids you really need to get started as soon as possible). Unlike retirement where you have upwards of 40+ years to save, for college you only have 18 years. In that short amount of time you are going to have to rely on your contributions more than interest. For every year you delay starting to save, your final balance will really take a hit. My hope is that we can give our daughter a boost in life by getting her through college without taking on a bunch of debt. Her life will be so much easier if she can get an education without being saddled by huge student loan payments.
Are you saving for your kid’s college yet??
Hazzard,
Just curious what your college savings rate looks like? We are saving roughly $100/mo per kid from the beginning and have been upping the contribution amount $5-$25/yr. I’d like to think we will be in decent shape (thinking 50% or more of costs would be covered), but also have read that to cover expected college costs would likely need a monthly contribution of $400/mo per child and we are well short of that.
We only have one child and have been saving $400 a month. We expect we’ll probably have around $90-100K by the time she goes to college. Depending on her degree and any graduate schools etc, it may be enough or not even close. :)
My oldest will turn 14 next month. I have been paying extra on the mortgage for quite some time. The house will be paid off by the start of her senior year in high school. We plan on using the money that used to go to the mortgage plus the extra to pay for college. Her senior year of high school will pay for the freshman year in college and so on. This way the household budget doesn’t change. If she needs more then we can pay for it out of current income.
awesome post! It made me realize how hard life can be especially if we are faced with situations were not yet ready! It’s good to know that there are a lot of institutions that can help in terms of saving for our child’s college. I’m married now, with 2 kids, and boy I’m just so happy that we started saving really early for their future!