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Savings by your kid's age: How much to save for their milestones

What we'll cover

  • 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

To give you a head start, we've broken down the average annual expected costs for kids by age. Use these numbers as benchmarks for your yearly savings goals, but keep in mind that depending on your family's situation, the amount you need will vary.

Annual costs per child depending on your kid's 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.

You can make it even easier on yourself by automatically setting money aside for specific goals with savings buckets , a feature of Ally Bank's Savings Account . You can create and name different buckets to match what you're saving for, then pick how much and how often you want to contribute, all while earning interest on your total savings account balance. Over a 12-month period, people using our smart savings tools grow their Ally Bank Savings Account balances two times more, on average, than those who don’t. This is based on the average balance growth of accounts opened since we launched our smart savings tools.

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 most common college saving strategy is a 529 plan . With it, you have two options:

  • 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).

Don't forget to take a look at your own investing strategy . Use this calculator to get an idea of how much an investment could potentially be worth over time based on how much you want to invest, how long you plan to invest for and what you expect as your rate of return.

This calculator is intended to be informational only and does not indicate future performance or returns.

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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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