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College Savings Definition
Planning for your child’s college education is often a lengthy process, especially if you want to save enough money for them to be able to afford any college in the country. For families that are serious about starting quality college funds for their kids, it is a good idea to use college savings calculators to do the maths.
Use the Calculator
A college savings calculator can help you discover how much money you have to save on a monthly or yearly basis. By entering in the amount you want to save, the years you will save for, the interest rate and the amount you have already saved, you can come up with a final figure.
Instead of sitting down and doing these calculations yourself, just use the college savings calculator.
Here is an example of how it works:
For the target amount, we will select $200,000. This may seem a very high figure, but it is probably the average cost of a four year Bachelor’s degree from a top university.
The number of years you will save can be set at 18, which is the age most kids go to college.
For before tax interest rate, you can put 4.5%. For a more accurate figure, you may need to ask the financial firm that will be handling your college investment/savings account.
Amount already saved can be put as $20,000.
The College Savings Calculator tells us that in order to save an additional $180,000 in 18 years, with a 4.5% interest rate in the savings account, we will have to save about $7,500 a year or $625 per month.
What this college savings calculator shows is that it is vital for families to save on a gradual basis. There is no way that you can save $200,000 with two or three years, especially if there are other expenses that have to be kept up. Having a proper college savings account is all about making gradual deposits every month, and allowing those to add up to the necessary total by the time your college bound kid is 17 or 18.
Let's be honest - sometimes the best college savings calculator is the one that is easy to use and doesn't require us to even know what the college savings formula is in the first place! But if you want to know the exact formula for calculating college savings then please check out the "Formula" box above.
Add a Free College Savings Calculator Widget to Your Site!
You can get a free online college savings calculator for your website and you don't even have to download the college savings calculator - you can just copy and paste! The college savings calculator exactly as you see it above is 100% free for you to use. If you want to customize the colors, size, and more to better fit your site, then pricing starts at just $29.99 for a one time purchase. Click the "Customize" button above to learn more!