Posted: 2014-03-14

by Kathryn Flynn

Congratulations! Youve made the smart decision to begin putting away money for your childs future education costs. Like many other parents, you believe that a college degree is important and want to do all that you can to help make it happen. But just how much do you actually need to save to achieve your goal? If college costs continue to rise at an average of 5% annually, in 18 years you could be paying around $237,000 for a 4-year degree from a public university ($464,000 for private school).

Of course, the actual amount will depend on a number of different factors. Will your child live on campus, or commute? If a car is needed, who will pay for the gas and maintenance? Is there a possibility that they will receive a scholarship? What are your feelings toward supplementing your savings with loans?

The type of savings vehicle you choose can also make a big difference. Stuffing money in your mattress may work for some, but we suggest considering tax favorable options like 529 plans or Coverdell Education Savings Accounts. In any case, the magic of compound interest will pay off for those who start to save early.

For more insight on what your total cost of college might be, take a look at our infographic below. We analyzed a wide range of data based on the actual expenses related to higher education and how American families are footing the bill. For more personalized help, visit the Worlds Simplest College Cost Calculator to create your very own savings plan today!