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In the last 2 posts, I been taking about how Time can make a ton of difference. We have seen “Compound Interest Magic” & Life Insurance Play. This post we will see how important to start saving for Kids College education earlier the better.

We all know the greatness of good education. We also very well aware, good education is real important for our kids future. But Kids college education is not cheap and affordable anymore. It’s getting more expensive every year with an average increase of 6-7%.

For this sole reason, not many parents are able to afford this increasing price tag for their kids education. Important truth, they missed out on saving for their kids education earlier. If you start thinking and plan to take action on saving for kids education now, you can beat the crowd to educate your kids.

Why you need to start now?

According to an article in thinkfinancial.com, the cost of college savings grow 5-6% every year.

The article also says, a student could get away with spending $433 a year in 1975 for an average Public School, or $2,272 per year on average for a private school. Today one would expect to pay approximately 10 times those amounts. The 2005-2006 college year ended with an average Public School cost of $5,491 per year, and the average private school costing $21,235 yearly.

Over the past 10 years the average private school tuition has increased at a mean of 5.8% while the public colleges have increased more rapidly at a mean of 6.9%. Taking these averages and applying them to future years can give us a rough estimate of what a year of college may cost down the road.

Ten years from now in 2017-2018 with current tuition rate percentages (5.8%), the average cost of one year at a private college is estimated to be $41,771, while public schools will average tuition of $12,228 per year.

Twenty years from now in 2027-2028 with current tuition rate percentages (6.9%), the average cost of one year at a private college is estimated to be $76,406, while public schools will average tuition of $23,832 per year. The above discussion took only Tution fees into account.You still have lodging, boarding, books, transportation and other expenses. If you add all up together, the sticker price for 4 academic years at a typical public university can go to $200,000 to $250,000. The cost of a year of college rose by about 6 percent in 2006, outpacing wages, inflation, or financial aid, the College Board reported today.

In fact, the cost of obtaining a degree is rising even faster because students are taking longer to graduate. Instead of paying for four years of college, the average public university student pays for more than six years of tuition before marching off to “Pomp and Circumstance.” Private school students finish quicker–taking 5.3 years on average, stated by another article.

All the above detail charts only show that you can expect to see a high bill for your kids college in 20years. Instead of worrying about, just take action atleast in a small way.

I will continue College savings talk in the next part on “Which vehicle to invest?”, deMystification of Kids Education Plans and how you can start small. Watch out..