How much to save for college

Financial Advisor Christine Nielson shares advice for parents on how much is enough to save for their children's future college fund
How Much Should Parents Save For Their Child's College
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How much to save for college

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The amount you put aside each year to make sure your child can attend the college of their choice really depends – there is no magic number. The important thing is that you start early and are consistent. I advise people to also talk to friends and family and ask them to contribute to a college fund you set up in lieu of clothes and toys for children at holidays and birthdays. To know how much you need to put away, you first will need to decide what college you want your child to attend. Is it going to be a state college, private college? There’s a difference in cost. Once you’ve decided on the college, see how much the current fees are. Using an inflation rate, factor in what a cost would be when your child is going to college. So for example, if your child is going to be going to college in 10 years time and the cost of a 4-year college based on on the cost now will be 200 000 at that time, you’re going to need to put away – based on the 5% return – you’re going to need to put away about $14 000 a year. However, if you were to start that saving’s plan from birth, so you’d have 18 years instead of 10 years to do that, your annual requirement for saving would be 5700 a year. A huge difference. So I cannot emphasize enough the need to start early.

Financial Advisor Christine Nielson shares advice for parents on how much is enough to save for their children's future college fund

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Christine Neilson

Financial Advisor

Christine Neilson is from London, England and moved to the United States in 1991. She has a BA with honors in Business Studies with an emphasis in  Finance from South Bank University in London. Prior to moving to the United States, Christine worked in the computer industry for seven years as an operator and programmer before becoming a Surveyor specializing in commercial real estate appraisal, acquisition and development.  Having recently obtained her California and Washington real estate licenses Christine is merging her extensive financial advisory and real estate experience to provide unique expertise to clients.

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