Forget the horror movie – let’s look at something really scary this Halloween.
College costs!
Because when you take a real look at the numbers they can be absolutely terrifying.
The Costs
When researching the costs of college there are numerous factors that can affect things – in state vs out of state, public vs private universities.
If you have a young child it can be tough to know what type of university they might want to attend or to get an idea of what the average costs might be for the different types of schools.
Fortunately the Education Data Initiative is a group of researchers that gathers and organizes College statistics in an easy to understand format.
They just released their most recent averages for September 2023 and oh man, it is scary stuff.
According to their report the average for a single year of college, including books, supplies and any living expenses your child would need is $36,436.
That puts today's total average costs of a 4 year education at $145,744.
The Future Costs
But wait there’s more.
You know that pesky thing called inflation? How things get more expensive over time?
Well unfortunately if you have young kids that’s a big factor here too.
According to the Education Data Initiative since the year 2000 the costs of college has more than doubled, and the average college inflation in the last 10 years has been about 2%.
That means if you have a newborn, at a 2% inflation rate in 18 years that $36,463 number will be $51,057 for a total 4 year cost of $204,228.
If you have 3 kids under the age of 10 you could easily be looking at over half a million dollars for education costs.
And this is before you factor in the additional interest payments if loans are needed.
What You Can Do About It
You know how every horror movie the group wants to split up and you scream at your TV because of how horrible an idea that actually is?
That’s me when people say they’ll wait to figure out what to do about college expenses.
Instead of putting this off there are some simple things you can do to make your life a heck of a lot easier when your kid is ready for college.
For starters I’d recommend taking a look at that report I mentioned. It’s a great resource that I think will give you a better idea of what to expect when it comes to different types of education costs.
The next thing you should consider is talking with your kid about these subjects as soon they’re old enough to understand the subject.
Get a feeling for their goals and set realistic expectations about where they might be able to go someday.
Obviously those answers will vary but if costs are a concern there are major differences between universities that can make things easier.
For example a private out of state university is going to be drastically more expensive than an in state public university. Better to be on the same page and set expectations today then to wait until applications are being sent out.
And of course my biggest recommendation - start saving today.
Whether you can afford to save a little or a lot, if you start saving now your future self will thank you.
Not to mention using the power of compound interest in your favor. The earlier you start the more time you have for your money to grow.
And you also have additional education specific accounts such as 529 plans, which come with their own unique set of tax benefits for saving for education costs.
My point is as scary as this subject is it certainly doesn’t have to be, but the key is to plan and plan early.
Of course if you’d like some help I’m always here for a quick phone call.
Or if you'd simply like some investment tips for those working in the Pharma industry...
I wrote an eBook just for you.
It's completely free and you can get it right now here.
