Savings by your kid's age: How much to save for their milestones
- Oct. 18, 2023
- 3 min read
The cost of raising a child today
Saving goals based on your child's age
Ways to teach kids about finance
The average cost of raising a child in the United States is more than $300,000. That can sound daunting, but by breaking that number down into smaller savings targets — growing your savings year by year alongside your child — you can tackle those costs with confidence.
Set annual savings goals by age
|Your kid's age||Annual costs per child|
|0 to 2 years||$13,600|
|3 to 5 years||$13,600|
|6 to 8 years||$13,200|
|9 to 11 years||$14,100|
|12 to 14 years||$14,000|
|15 to 17 years||$14,900|
Note: These numbers are based on the average financial needs per child for a family of four with an income of $75,000 to $100,000/year — roughly the median amount most Americans believe families need per year.
Be specific and strategic
Try to get specific as you plan out your savings goals. It's impossible to know exactly what expenses lie ahead, but mapping out the costs you're able to anticipate (food, clothing, school, childcare) can help you prepare. Don't forget to include some funds for fun.
Be patient with yourself. Much like parenting, saving is a marathon, not a sprint.
Get ahead on college funds
It may seem like a distant future now, but it's never too early to start putting money aside for your kid's college education. Today, the average cost of attendance (including room, board and tuition) for four years at a public, in-state school is just over $100,000. For private universities, the number jumps to more than $200,000 on average.
By starting to save early, you have time to carefully consider your choices.
The first is a general college savings plan.
The second is a prepaid tuition plan. This plan locks in the current tuition rates for public institutions.
But a 529 is just one approach. For example, you also could create a trust or use a money market account .
Keep your kid(s) in the loop
In addition to saving for your kids, you will want to make sure you're giving them the money tools they need to succeed. You don't need to involve them in every step, but look for financial literacy opportunities to begin boosting their confidence.
Including your kid(s) in the process can be a great way to teach them about money while also working toward their financial future goals. Consider adding an investment lesson with a custodial account . It allows you to invest money on behalf of your child until they reach adulthood (18 to 21 years of age, depending on the state).
This calculator is intended to be informational only and does not indicate future performance or returns.
Be patient with yourself. Much like parenting, saving is a marathon, not a sprint. By starting as soon as possible and being strategic, you can set yourself and your kids up for financial success for the many years ahead.
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