You’ve probably heard that by the time your child graduates high school it will take a fortune to go to college. While public colleges and universities are reasonable for many families right now, the cost is expected to rise to over $100,000 in 18 years from now. Want to send your child to that same private school you attended? Be prepared for a tuition of close to a quarter of a million dollars.

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But if you start right now, you are going to be just fine. Time is the biggest factor in saving a large amount of money. It can work for you if you start today. If you wait until you child is in high school, it will not be your best friend — it will just move too fast.

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I don’t know where to begin, you may be saying. So many parents aren’t saving for their children’s education because they really don’t understand what they will be facing. Many expect grandparents or other relatives to help out. But they don’t realize that 18 years is a long time and a lot can happen.

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Start saving now. Every little bit counts. Remember that the early you start, the less it will cost you. Interest works for you in many ways. Even a few dollars a week can end up buying several classes later on.

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Start by estimating what your child’s education will cost. At 5% inflation, the average public university may cost around $24,000 a year in 18years. If you have older children, the cost in ten years will be around $16,000 using the same calculations.

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Use these numbers to get you motivated. And yes, some of the education costs may be covered by scholarships and financial aid, but you never know. It is better to save too much than not enough.
You can simply use an online calculator to determine how much you will have to save each year to reach your goal. Remember, interest is working for you here, so it isn’t as simple as dividing the goal by the time you have to save. You will find that the sooner you start, the less you put in.

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Keeping this in mind, a savings account or money market account doesn’t pay very good interest. Most advisors recommend that if you are starting early, you should be aggressive. Stock funds out-perform other investments over the long term. Remember, this is an investment that requires your attention. Don’t just put it somewhere and leave it. Pay attention to the performance of the funds. As you get closer to your child’s high school graduation, start moving the money into more conservative investments.

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Many people want to know which is more important, saving for retirement or for a child’s college education? You can do both. Make your retirement your priority, but don’t ignore the savings for your child. Parents that are disciplined in saving money will teach a child a lot in life. Just as the college experience will.

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