How Much Should I Save for College?
This calculator helps you estimate how much you should be saving for your children's education.
Most parents planning to send their children to college have a great deal of apprehension about the overall costs associated with college, and are constantly questioning whether they have saved enough to fund their children’s education. While the calculator below will help you determine how much you should save, there are some other important considerations when making this decision.
Is college right for your child? While college graduates, in general, earn more over their lifetime than non-graduates, everyone is not suited for college, and college is certainly not a requirement for success. Many careers, especially those in the trades, do not require a college education, and you child may be better off getting real-world work experience or acquiring an apprenticeship.
Is a two-year or four-year college a better option? Many careers that require a college degree only require an Associates Degree, so, if these types of jobs interest your child, this may be the most cost-effective path. In addition, even in the case of four-year degrees, there can be dramatic costs savings gained from going to a two-year college first, then transferring to a four-year college for the final two years. Be careful, however; some colleges are heavily weighted to freshman acceptances, so transferring in as a Junior may be difficult.
Is a public or private college a better choice? The general rule of thumb is that public in-state colleges are the most affordable route to go in terms of four-year colleges. However, there can be many exceptions to this rule. For example, many private colleges offer better financial aid packages, including both merit- and need-based loans and scholarships, so this may tilt the total cost decision in their favor. It is always wise to never rule out an option until you are able to look at the overall financial aid package a particular college is willing to offer your child. And, of course, factors such as location, majors offered, and reputation of the school are other important considerations when making this decision.
What are your options in terms of paying for college? Do you currently have savings allocated towards your children’s education, or do you have the income to begin saving for their college? Do you have relatives who may be willing to help? Will your child qualify for need or merit-based aid or scholarships? These are all important considerations when mapping our your children’s future educational path.
If you have processed all of these considerations, and think that college is a likely route for your children, then it wise to start saving for their education as soon as possible! The College Savings Calculator below will help you determine how much you should be saving in order to fund your children’s college education. While this will provide some general direction, it is always wise to seek advice from a professional financial advisor to make a final decision as to which is the best option for you.
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