The theme this week on the One Minute Retirement Tip podcast is: How to save $100,000 for your grandkids college

Today, we come to the heart of the matter. I’m sharing with you why saving $100,000 for college isn’t as hard as it sounds. Today, the average cost of a 4-year public university in Oregon where I live is about $22,000. 4 years of college will cost in the ballpark of $100,000 today. Now that’s going up by about 5% per year, so you can expect to pay more than double that in 18 years. 

I’m going to assume that most of you listening have children who are already in college or beyond, so this doesn’t help you out with saving for your own kids college, but you may have young grandchildren or future grandchildren arriving someday, so I’m going to talk about this from that viewpoint, and assume you have 18 years to save for college, since your older and smarter now, and you want to help that grandbaby of yours pay for college.  

I think it’s a good goal to try to save at least 100,000 for college, since it’s likely that the grandchildren will pay a lot more than that for college anyways. It sounds like a lot, but not when you start once that baby gets his or her social security number.

If you start saving when that grandbaby of yours is a newborn, and you save $200/month for 18 years, and it grows 8% a year, you’ll have about $100,000 when your grandchild enrolls in college. If you can incentivize the parents to contribute as well - let’s say you’ll double match every dollar they invest...they save $100/month, you save $200 - that’s $300/mo going into the college savings account, you’re up to about $145,000 by the time college starts. 

So as long as time is on your side, it’s not as hard to save $100,000 as it sounds. If you can’t afford to contribute $200 a month, consider going the matching route with the parent’s where you each do $50 or $100 a month. Starting early and saving consistently for 18 years is the key for making college a lot easier to pay for.

That’s it for today. Thanks for listening! Come on back tomorrow where I’ll talk more about how to calculate how much you’ll want to save for your unique circumstances. 

My name is Ashley Micciche and this is the One Minute Retirement Tip. 

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance