Save Money for University
If you have a child that will some day be attending university, then you need to start saving money. This is a process that can take years and years, so it is best if you can start early.
Instructions
1. The first step is to determine the target university for your child. There is a huge difference in tuition costs between say, state universities and Ivy League universities. You need to have an idea of what university you want to save for.
2. Once you have chosen a target university or two, you can look up the tuition. Most schools will publicize their tuition on their website. So you can type the name of the university + tuition on a search engine and usually you can find the tuition per semester.
3. A student normally needs to enroll eight semesters in university for undergraduate, four semesters for a masters degree and eight semesters for a Ph.D. Multiply the amount of tuition per semester times the number of semesters. For example, if you have a child that will attend undergraduate for eight semesters and the tuition is $5,000 per semester, you would multiply 5,000 * 8. The result if $40,000.
4. Now you have a rough estimate of how much you need to save for university. There is one problem, however. Normally the tuition increases every year. So you have a three year old child, in fifteen years the tuition will be much higher. So what you will need to do is each year, re-check the tuition and readjust how much you need by applying the above formula.
5. Now you have a gradually increasing amount that you will need to save. Each year, when you calculate the costs, then you need to divide by the number of years left. For example, let's say that at the current level of tuition, it is $50,000 for four years (eight semesters). Let's say your child is eight years old and you have ten years left.
So divide:
50,000 / 10.
That's $5,000 you will need to save per year. Next year, it could be $5,500 per year.
6. Keep in mind that tuition is not the only cost. There are also books, and living expenses. So you will need to pad the number a bit.
7. You now know how much you need to save every year. Have an electronic draft be taken automatically from your saving account and then INVEST the money in something safe like bonds so that you can help combat tuition inflation.
8. Every year, review your savings and see if you are on target. If not, then re-adjust the amount you are drafting every month.
9. Have your child apply for scholarships, especially if he or she is an outstanding student. Also, encourage your child to work and save some money to help defray living expenses.
10. Now you know save for university. Good luck!
Tags: eight semesters, need save, will need, your child, much need, tuition semester