Personal finance site NerdWallet recently surveyed 600 expectant mothers and 600 mothers of teenagers to see if the financial fears expectant mums face are likely to become reality. One of the immediate insights: Everyone is worried about saving for college.
And they have good reason. NerdWallet took into account the rising cost of college tuition at public and private four-year colleges — using data from the College Board — over the last ten years, forecast the next 18, and calculated how much parents would need to save per year if they intended to fully or partially fund their child’s education.
For this calculation, the site assumed parents would be saving in a 529 savings plan, a state-sponsored account that invests your savings and earmarks them for tuition costs only.
Bad news for parents who are late to the savings game: Even if you only plan to cover half of your child’s tuition at a public school, if you start saving when your child is 15, you’ll need to set aside over $US15,000 a year. As always, the sooner you start saving, the better.
Here’s what NerdWallet found:
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