Part 3: How Much to Save Each Month
You know your inflation-adjusted target from Part 2. Now let's calculate your monthly savings needed to reach that goal.
Note: We are going to first calculate how to save for college the 'classical' way to get a feel for the maths. Then we will look at how there is the potential to front-load this within financial independence.
Four Numbers That Determine Your Monthly Savings
1. Your Target Amount
The inflation-adjusted future cost you calculated in Part 2.
2. Current Savings
Any money you've already saved for college.
3. Time Until College
Years remaining until your child starts freshman year.
4. Expected Growth Rate
Annual investment returns based on your timeline.
Calculate Your Monthly Savings
Use the calculator below to see exactly how much you need to save each month:
College Monthly Savings Calculator
Your College Savings Plan
Monthly Savings Required
$582
Save this amount monthly for 10 years
Total Contributions
$69,899
Over 10 years
Note: This calculator assumes steady returns and does not account for taxes or fees. Adjust your plan as needed.
What Investment Growth Rate to Use
Your expected returns depend on how long you have until college. The closer to college, the less risk you want to take.
1-3 Years
Savings accounts, CDs
4-8 Years
Conservative investing
9+ Years
Stock market investing
Note:Use 7% for most calculations. It's conservative but realistic.
Why Starting Early Makes All the Difference
Let's look at the dramatically different monthly savings required depending on when you start. In this example, our target is $150,000, starting with $0 saved and assuming 7% returns.
Start at Birth
(18 years to save)
per month
Start at Age 8
(10 years to save)
per month
Start at Age 13
(5 years to save)
per month
Key insight: Starting when your child is born requires 6x less monthly savings than waiting until they're 13.