How to Save For Your Child’s College Education

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In the last 20 years, in-state tuition fees have increased by 212%, while out-of-state tuition and fees have increased by 165% in public schools, and 144% in private colleges.

As a parent, you have many things to take care of, one of them being your child’s future education.

The escalating costs of education are something many parents worry about and the best way to tackle it is to start saving now when your kids are young.

The last thing you want is for your child to take on a giant student loan, that they will be working to pay off for most of their adult life.

How Much Will I Need to Save for My Child’s Education?

The answer to the question “how much will I need to save for my child’s college” obviously depends on what college your child will end up going to, as well as what career path they choose.

However, we can give you an idea of how much you will need to have ready, based on a modest budget (meaning fees could be higher):

  • Four-year public college in-state: $27,000
  • Four-year public college, out-of-state: $44,000
  • Private college: $55,000

This is why it is best to start saving earlier on, stashing away smaller amounts of money over a long period of time. Getting a head start also gives your money a chance to grow.

The First Step of Saving For Your Child’s Education

While saving for your child’s college is very important, one of the first steps you should do is to make sure that your own and your family’s financial situation is in order.

This does not need to take a long time and doing so will help you save more money in the long run.

This first starts with making a budget for yourself and your family, you can read more about that here: How to Make a Budget.

Other things in this first step would include paying off any credit card debts. Credit card debts usually carry a lot of interest, which could all be money you can put towards your child’s education savings.

You may want to make sure you have an emergency fund and a way to regularly add to it so that if an emergency arises, you don’t use your child’s education money to solve it.

You might also want to make sure that you have some kind of retirement plan in place so that your future is also taken care of.

These are all things that you should have in order and that, if you do, will make it easier to save for your child’s education in the long run.

Ways to Save For Your Childs Education

Here is a list of ways that you can get a head start and save for your child’s education:

  1. Open a 529 plan.
  2. Put money into eligible savings bonds.
  3. Try an Education Savings Account.
  4. Start a Roth IRA.
  5. Put money into a custodial account.
  6. Invest in mutual funds.