Seeing How Much You Can Save
How much you can save for your child depends on three factors: How much you're able to invest; how long you have; and how much you can earn in interest.
In general, investing a small amount each month for 18 years will yield greater savings than investing larger amounts for four or five years. Table 18-1 below gives some examples of what you'd save if you put money for college in a tax-free or tax-deferred account.
To find out how much you can save for your child's college fund, visit the FinAid site and click on their Calculators section. You can play around with the numbers and determine how much you can save over time.
Monthly Deposit |
Interest Rate |
Number of Years |
Total Savings |
$25 |
5% |
5 |
$1,707.24 |
$25 |
5% |
18 |
$8,766.43 |
$165 |
5% |
18 |
$57,858.41 |
$165 |
2% |
18 |
$42,928.53 |
$165 |
9% |
18 |
$89,161.77 |
$500 |
5% |
3 |
$19,457.41 |
$500 |
5% |
18 |
$175,328.52 |
