According to the Education Data Initiative, the average annual cost of college per student, per year in the U.S., including books, supplies and living expenses is $36,436.1 The average cost of college has risen over 2% over the last decade. These numbers can seem daunting, especially if you're getting a late start. Here are some steps to help you save more aggressively for your child's education.
Use the One-Third Rule
This baseline strategy involves saving enough money to cover 1/3 of the total college expenses, planning ahead to put 1/3 of your income towards these payments, and relying on student financial aid to cover the last 1/3. But don't hold back if you can save more!
Ask for Gifts Towards a Higher Education
Another option to reduce this burden is to involve the family. You can start by revealing your college savings goals, then ask for financial contributions instead of gifts for special occasions. If your child qualifies for aid or scholarships, they can potentially reduce the cost burden simply by maintaining good grades.
Keep Saving Throughout College
Taking some simple steps can help you (and your child) save on college expenses. Consider for instance:
Don't Forget to Keep Your Retirement Savings Intact
Despite getting a late start on saving for your child's college education, you should still prioritize saving for your retirement. Why? You can't borrow money to fund your retirement, unlike some of the available options for funding your child's college education.
If you want to talk about planning, saving and investing for college expenses, let’s get a meeting scheduled.
1) Hanson, Melanie. "Average Cost of College & Tuition." Education Data Initiative, 25 June 2023, https://educationdata.org/average-cost-of-college.
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