Set a monthly college fund contribution for your child.
College funding has two compounding effects working against each other. Education costs have historically inflated faster than general prices — 4 to 6% a year is the usual planning assumption — so a 22,000 dollar year becomes about 39,500 in twelve years, and the four-year total is far more than four times today's annual figure. Working for you, investment returns compound over the same period, so money already saved grows and monthly contributions accumulate. The calculation projects each year of study at its own inflated cost, grows the existing balance, and solves the remaining gap as an ordinary annuity to give the monthly figure. Starting early matters enormously here: the growth factor rises steeply with the number of months available.
College Fund Goal
First-year cost = today's cost x (1 + inflation)^years; total = sum of each study year inflated; monthly = (total - current savings grown) x r / ((1 + r)^n - 1)
A projection based on your assumptions, not advice or a guarantee. Investment returns vary and can be negative, and education costs, tax treatment and available aid differ by country and institution — consult a qualified financial adviser about your own circumstances.
Because each of the four years is inflated separately, and the fourth year is three years further out than the first. At 5% inflation over twelve years, the four-year total is roughly 7.8 times today's annual cost.
Something below long-run equity averages, because the horizon shortens as college approaches and most plans de-risk toward bonds. Five to six percent is a common planning figure.