One of my good friends just had a baby recently.
He’s considerably younger than me, so he gets to hear, solicited or not, all of the wisdom I have accumulated. We talk about parenting, current events, politics, etc. Basic stuff.
One day he asked my when he should start funding college for his new daughter and boy did I have an earful for him.
You see, I just (tearfully) dropped my youngest off at the University of Georgia a few weeks ago. She is on an academic and a music scholarship. She worked very hard throughout her middle and high-school years and her hard work is saving me a good bit of money.
In 1993, the State of Georgia started the HOPE Scholarship, which funds most of your child’s college if their grades are good. The Zell Miller pays for ALL of the tuition. (Thankfully we got Zell). As a parent and advisor, I thought, “Hey, if their grades aren't good enough to get this scholarship, they shouldn’t go to college.” (I still believe that to a point). So tuition is paid 100% and all I have to do is fund room and board, travel, and miscellaneous things I’d have to pay for anyway if she were living at home. Sounds reasonable.
The total before scholarships is close to $26,000! And tuition is only about $10,000 of that! My tuition my last year at UGA was $600 a quarter. Tuition costs are spiraling up faster than one of Elon Musk’s rockets!
So what did I tell my friend?
“START SAVING NOW!”
At a 5% inflation rate, (which is debatably low for college costs),that one year cost of $26,000 will be north of $62,000 in 18 years. $248,000 for college! So basically undergrad will cost two times what I paid for my first house when my friend’s daughter heads off to university.
When to start is the easy question to answer. Next time I will address what percentage of your income should you put towards saving for college.
When did you start saving for your children?