● Money & small business
How much to save for college each month: a worked 529 example for two kids
"How much should we be putting in the 529?" depends on four numbers: what college will cost by the time your child gets there, how much of it you want to cover, how long you have, and what you've already saved. Here's one example family worked through, from the sample file of our college savings planner.
The family
- Two children: Maya is 3, Leo is 8. Both start a 4-year college at 18.
- College costs $28,000 a year today (tuition, fees, room and board), rising 4% a year.
- The parents want to cover 60%; loans, scholarships and summer jobs can do the rest.
- Maya has $9,500 saved and gets $250 a month at a 6% expected return. Leo has $21,000 and gets $300 a month at an assumed 5% (more cautious, since college is closer).
Step 1: what college will actually cost
$28,000 a year is $112,000 for four years today. But Maya starts in 15 years: at 4% a year, her first year costs about $50,400, and her four years together $214,134. Leo's, 10 years away, come to $176,003. The 60% goals are $128,480 and $105,602.
Step 2: where today's plan lands
| Maya (3) | Leo (8) | |
|---|---|---|
| Projected savings at 18 | $96,019 | $81,172 |
| Goal (60%) | $128,480 | $105,602 |
| Gap | $32,462 | $24,430 |
| Share of the goal covered | 75% | 77% |
| Monthly contribution that closes the gap | $362 (+$112) | $457 (+$157) |
| Or a lump sum today instead | $13,228 | $14,833 |
Together that's $819 a month, $269 more than they put in now. Note that Leo's goal is smaller than Maya's, but he needs more per month: there are 10 years of compounding left for him, against 15 for her.
Time does most of the work
For a child starting from nothing, with the same cost, return and 60% goal:
- Starting at birth: $373 a month for 18 years, for a goal of $144,523.
- Starting at age 8: $644 a month for 10 years, for a smaller goal of $105,602.
Waiting eight years almost doubles the monthly amount, even though the target shrinks.
Which assumptions matter most
| Maya's plan, one change at a time | Monthly needed |
|---|---|
| As above (6% return, 4% inflation, 60%) | $362 |
| Return 4% instead of 6% | $452 |
| Return 8% | $281 |
| College inflation 3% | $296 |
| College inflation 5% | $437 |
| Cover 100% instead of 60% | $656 |
| Nothing saved yet ($0 instead of $9,500) | $442 |
A point of return or a point of college inflation each moves the answer by roughly $65–90 a month over 15 years. That's why the plan is worth re-running once a year with real balances instead of set once and forgotten.
Your numbers
The free college savings calculator does one child at a time, with the same formulas. Every figure above is from the sample file of our college savings planner (up to four children), where every result was checked against an independent month-by-month simulation. Returns and college costs aren't guaranteed; check your 529 plan's own fees and state tax rules. Not financial advice.