Childcare can be expensive even if you limit your thinking to diapers and baby formula. Of course, the cost of raising a child does not stop there, but most parents don’t think of saving for college until somewhere down the line. The fact of the matter is that the sooner college is factored into the equation the easier it is to handle when that time comes. Take a look at how to figure out just how much to put aside for your child’s education.
Figure Out the Cost of College
The first thing you need to do is figure out how much college is likely to cost. To do that you can get estimates from college websites. All universities provide information on what their programs cost as well as give the average cost of room and board at the institution. CNN Money provides a neat tool to find the cost of any college just by inputting the name of the university and the state. Of course there is no way to know if your child will go to an Ivy League college out of state or a Public College just around the corner so you also need to keep this curve ball at the back of your mind. It may be a good idea to focus on a number that is somewhere in the middle of these two possibilities so you can come up with a way to fund the shortfall if you need to or you end up with excess money that you can give your child for another aspect of life.
Start a New Account
If you want to have the best chance of achieving your goal you should create a separate account to hold your child’s college savings. It also helps to make your transfers to this account automatic so there is a smaller chance you’ll miss a payment or forget to make a deposit. How much you save every month depends on how much your overall figure comes up to as well as the number of years you have until your child gets to college age.
Find Ways to Cut Costs
It may be extremely difficult to find the extra money to save, but if being able to give your child the option of going to college without the stress of extensive education loans then you will be able to find ways to cut back. Maybe you could eat out less or conserve on energy to save money on bills and divert this to your child’s college account. Take a look at these ideas for saving money.
Track Your Progress
Finally, tracking your progress gives you the motivation you need to continue. Since saving for college is likely to be a long term goal you’ll need to stay focused to meet your target and tracking how much you have achieved and how much you still have to go can help you to stay on course.