Calculating Future College Costs
Did you know that parents of a newborn should start saving approximately $700 per month for the next 18 years in order to save enough money to pay for four years of college at a University of California (UC) school?
That’s right – with college cost of attendance (COA) at a UC coming in at $30,000 today and anticipating a five percent increase in COA per year for the next 18 years it’s a good idea to get a jump on saving. Tuition is just one part of the picture. COA numbers take all the costs of a year in college into account, including tuition, room, board, books, transportation and personal expenses. While actual costs will vary, it’s a good idea to start with an estimate.
There are a number of online tools to help you calculate the amount you should be saving for your student, based on the current tuition and the number of years you have to save before your student will enroll in college. You can also use College Search to see a breakdown of expenses at any university or college your student is interested in.
Don’t let the numbers scare you, though. If you haven’t been saving enough, there are still plenty of ways to pay for college that won’t jeopardize your retirement.
When it comes time to help your student select colleges, don’t focus on the price tag. Instead, focus on how much will come out of your own pocket. To accurately assess your cost of a college, you need to know the sticker price and how much financial aid you expect to receive.
If you are looking for the best way to save for college, or help to estimate your expected out of pocket cost, we can help you figure out the best way forward. Contact us to learn more.
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