Choose the right savings goal for you
So you know you need to start saving for college, but just how much should you set aside each month?
The answer to how much to save depends on a few variables: the age of your child, the projected cost of the school they might attend and, how much you can allocate from your budget right now.
A recent survey by Sallie Mae found that parents expect to pay about 40% of their children’s college costs. One popular approach to saving is to focus on saving for just one category like tuition and fees.
To give you an idea of current college costs, the average cost of in-state tuition and fees, and books and supplies, nationally for a state university is approximately $10,000 per year, and if you plan to save for room and board, that could be another $10,000.
There are many different ways to tackle the question of “How much do I need to save for college?”. To help you get started, here are three potential paths to saving:
- Save for tuition and fees – you can accomplish this by enrolling in a guaranteed Prepaid Plan. Some families choose to save for all four years at once, while others choose to start with a 1 year or 2 year plan, allowing them to add on later. Buy yourself some peace of mind.
- “A realistic goal for many families is to aim to save 25% of projected college expenses,” according to SavingforCollege.com. “Everyone’s financial circumstances are different and it is difficult if not impossible to predict what the costs of your child’s college education will turn out to be. Choice of college and curriculum, eligibility for financial aid, gifts from grandparents or other relatives, and the ability to snag an academic or athletic scholarship will all be factors. In any set of circumstances you are better off saving something than saving nothing.”
- Aim to reach a savings goal of your own choosing. Build your own plan. Whichever it is, set some sort of goal and take measurable steps to achieve it. As the American author Zig Ziglar famously said, “If you aim at nothing, you will hit it every time.”
The sooner you can start saving, the better; starting when your child is born gives you the most time to prepare. But short of that, the best time to start saving is now. Florida Prepaid Open Enrollment is happening through February 28, 2018, and prices start as low as $47 a month for a newborn.