Before You Buy, Calculate
Before you go imagining yourself bankrupt after putting three kids through college and graduate school with no cushion for retirement, maybe you should get a reality check on what saving for college really entails.
Kevin McMullan, chairman of the College Savings Foundation, says that when it comes to saving for college, “the first place I would start is determining what the cost would be.” He suggests perusing the myriad financial services and student loan web sites out there like FinAid.org and The College Board, and using their free calculators that estimate what your monthly savings will have to be to meet your goals.
Bear in mind that college costs aren’t just tuition, room and board. You’ll want to factor in textbooks, a new computer, travel to and from campus, that surprise year abroad and all the other basic living expenses you’ve been covering for years.
“Then I would ask, 'How much can I start saving?' Figure it into your budget like it’s just another bucket to fill,” McMullan advises. Think of your various expenses, like insurance and retirement savings, as, well, buckets that you dump (or leak) your funds into each month and start one for college.