[Video] How Much To Save For College?

by Financial Design Studio, Inc. / July 16, 2018

MICHELLE SMALENBERGER, CFP ®

Now that you have a child or grandchild you may want to help them plan for college.  When they’re young we have time to plan ahead. We are going to look at a few different options to show the difference between college choices.  This will give you some idea to begin the conversation.

4-yr. Public In-State:

Tuition: $60,000

Room & Board: $15,000 per year

4-yr. Private Out-of-State:

Tuition: $125,000

Room & Board: $15,000 per year

2-yr. Junior College, 2-yr. Public University

Tuition: $36,000

Room & Board: $15,000 per year

In addition to the above annual numbers consider that education costs increase at a rate of about 5% per year.  Some states could have a much larger annual rate of inflation for college costs and some could be lower. So it will depend on the state you are considering.

As we started considering these costs and how we funded our education it made us start to consider how we want to be planning ahead for our daughter.  I attended a four-year, Public university in-state and Steve attended two years at a junior college and two years at a public, in-state university. As you look at the above numbers your mind might change depending on how you value the cost of education.

Ready to take the next step?

Schedule a quick call with our financial advisors.

Recommended Reading

The Mega Backdoor Roth Strategy

A Mega Backdoor Roth strategy is a powerful tool for high income earners that want to save more for retirement. Who can do it, and what are the rules you need to look for? Our in-depth article on the Mega Backdoor Roth will help you see if you're eligible and then give you a step-by-step...

How to do a Backdoor Roth IRA Contribution

A Backdoor Roth IRA strategy is a great way for people to save more money for retirement. But how does it work? And what are some of the rules you need to be aware of? Our blog answers these questions and gives you a step-by-step guide for doing a Backdoor Roth IRA.

Financial Design Studio, Inc.

We are financial advisors in Deer Park and Barrington, IL. A team with a passion for helping others design a path to financial success — whatever success means for you. Each of our unique insights fit together to create broad expertise, complete roadmaps, and creative solutions. We have seen the power of having a financial plan, and adjusting that plan to life. The result? Freedom from worrying about the future so you can enjoy today.