College savings vehicles are kind of like little black dresses—you absolutely need one, they come in lots of shapes and sizes, and they fit each person differently. Picking the right savings plan can be daunting, but the larger problems many families encounter are figuring out how to stretch their already-tight budgets to include college savings (how many times have you heard that it won't grow on trees?) and how to prioritize money left over at the end of the month. Like a knight in wordy, informative armor, we are here to help. This section will address how to prioritize your finances (Spoiler alert: College savings is not #1 on the list).
Before we pick apart your fiscal life, know that you are not alone. The Warren Buffet-level rich families out there are the only ones who are not sweating about college savings. The truth is that low, middle, and even upper middle income families rarely pay the entire sticker price to attend college. The National Center for Education Statistics reports that two-thirds of all undergraduate students receive some form of financial aid, meaning that your family will not be expected to pay the full cost up front. If families have not saved the entire cost of college by the time their children are ready to go to school, it is ok. Most parents don't and there are plenty of programs available to help you out with costs (skip to Shmoop's Guide to Paying For College: The Flavors of Financial Aid to read all about it). Instead of drowning in the overwhelmingly scary total cost of college, focus on setting a monthly savings goal. $200 to $400 per month is a good starting place for parents of newborns. Save just $300 a month (that is about $10 per day) and you will wind up with approximately half of the total cost of a four-year education at an in-state public college by the time your kid graduates from high school. You can more accurately see how saving will add over time by plugging your finances into this college savings calculator. If money is tight, college savings may not be your number one fiscal priority.