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College Savings 101

August 01, 2023

August is synonymous with heading back to school. For many, saving and setting aside funds for college tuition is overwhelming and daunting.

How soon should you start saving for your kids’ college education? The earlier the better, even if the amount you save at first is modest.

With college costs rising at twice the rate of inflation, it’s important not only to set money aside, but to invest it with an eye toward keeping pace with education inflation. Every little bit helps.

Let’s say you have young children and can only invest $100 per month to start. Assuming an annual investment return of 6%, your savings may have grown to $7,170.38 after five years. By then, you may be able to bump up your education savings to $200 a month. Assuming the same 6% rate of return each year, you may have $21,511.14 five years later. By then, you may be doing a little better financially and will be able to double your monthly contribution again, to $400. At that rate, you may have more than $88,500 10 years later—which could pay a significant chunk of your child’s college costs.

The key—just as it is with pursuing any long-term financial plan—is to get started.

Reach out to the team at IFG for valuable financial tips and advice about college savings. . We're happy to help! 

The hypothetical investment results are for illustrative purposes only and should not be deemed a representation of past or future results. Actual investment results
may be more or less than those shown. This does not represent any specific product [and/or service].