One of those responsibilities many parents put off is saving enough money for your child's college education. The kids seem to grow up so fast and the years just fly by. I have seen my own children grow up so fast that soon will be off to college. Saving money for that reason needs to take a priority, but many of us just put it off until the amount to save is so large that if only we started when they were born, we could of done so much better.
What's the cost of waiting?
I went to saveforcollege.com and used their college cost calculator. I entered as an example a child that was 10 years old. The results I got back were I needed to save $970 per month for the next 8 years. This was based on a 7% after-tax rate of growth each year. It was a pretty shocking amount of money I needed to save. But waiting till till the child is 10 to start investing was the reason the reason the amount was so high. With only 8 years of savings, an account growing enough seemed an impossible task. This is why many parents freak out and don't save enough or not at all.
If you don't wait.
I went back to the calculator and entered the number for starting to save the day the child was born. The calculator told me to save $602 per month and after 18 years, with 7% growth, I would have $312,166 after 18 years. Though with these results I could have enough to send the child to med school.
The take away
Saving for college for your child's education is a race that takes 18 years to complete. It shouldn't be a suprise when you notice the children are 10 years old. In our example, I agree the numbers are pretty high and the average family can never hope to save that much every month. But you do need to save an amount of money every month. But the key is to start early. With an 18 year time frame you have growth on top of growth on your side.
If you have children, right now is the right time to start saving. Even if it's only $50 per month, after 18 years with 7% interest you would have almost $8,000. If you waited till the child was 10 to start investing you would have 25% less money in your account. Don't wait, start saving today.