In a world where economic uncertainty puts financial strains on a household, many families have to save for both retirement and their children’s educational future. Many families save upwards of $100,000 per child simply for education. If there are 18 years from birth to high school graduation, then you need a mature way to attain a savings for your child’s college education.

According to CollegeBoard.com, ‘About 56 percent of students enrolled at four-year colleges or universities attend institutions that charge tuition and fees of less than $9,000 per year.’ The student would also have living expenses to consider, which would be approximately $10,000 extra each year. So a total expense would average around 20K per year, with the average student attending for 4 1/2 years. The total cost for tuition and living expenses could exceed $90,000. When you make your plan for each child, it’s probably good to consider inflation as well, so a healthy $100,000 per child doesn’t seem too far fetched.

Now that we have the goal, we need to find a way to attain that number. Since we don’t have kids at the same time (unless you have twins, or triplets, or quadruplets!) we should be able to use a 18/XX year variable. Let’s begin for one child.

Doing the Math

18 years to high school graduation and $100K goal.

$100K divided by 18 years equals $5,555 each year.

$5,555 divided by 12 months equals $463 a month.

So to save $100,000 in 18 years you would have to save $463 a month. This is, of course, without interest.

How Much Would it Take with Interest Factored in to the Equation?

We’ll use the online savings rate of 3.5% currently being offered by HSBC. to save $100K in 18 years, a person would have to contribute at least $333 a month into a 3.5% savings account.

The $333 payment would actually pay for one child, so doubling the figure would give you a good idea of the cost for two.

Savings Interest Rate Makes a Huge Difference

Finding where to put your savings may make the most difference in the long term. Having the money in a high interest bearing account would benefit your monthly budget — you could save less and be guaranteed the same amount. It’s best to put in more than our stark figures though, since cost of living will likely rise between now and your child’s foray into college.