We saved $150k per kid in 529s – but is spending another $20k+ per year during college really necessary?

College tuitions have been soaring for many years, and the price tag recently caught one Redditor off guard. This individual shared a post in the Chubby FIRE Reddit community about needing to save $200k per kid and also buying each kid a $30k-$40k car. Meanwhile, the Redditor only planned to put away $150k for each of their children.

Do you have to save $200k for each kid to get them through college? I will share my thoughts, but it is good to speak with a financial advisor if you can. Furthermore, the post attracted a lot of comments, which contained valuable insights.

Keep Costs Low with a State University

Students and parents can implement a few strategies to reduce their college expenses. Your children can apply for numerous online scholarships to keep costs low, and getting them involved at a young age can increase the likelihood of landing some awards.

However, you can save money right out of the gate by limiting the college search to state universities. You will save a lot of money if the children commute to college instead of living in dorms. While some parents want their children to experience dorm life, it’s important to consider the financial savings of commuting if you are indifferent to commuting vs. living in a dorm.

Inflation Can Increase Costs Even More

Colleges have been raising tuition at a much higher rate than inflation. Any additional inflation suggests that the cost of a college education will continue to increase. It’s possible that the Redditor’s $150k portfolio for each child outpaces tuition growth rates. However, it’s good to keep in mind that college costs will likely increase over time. 

Declining fertility rates can reduce college tuition in the long run. For now, any inflation will likely result in a more expensive college experience.

Kids Get More Expensive As They Get Older

One Redditor responded to the post by explaining that children get more expensive as they get older, especially if they go to colleges in different states. A wife mentioned that they have two college-aged children and pay around $40k/yr for each student. 

However, there are a bunch of incidental costs as well. The children are located 1,000 miles away from home in opposite parts of the country, so flights home add up. The wife mentioned that if they had to start over, she would have preferred for the husband to keep working until the youngest graduated. 

You Can Help Outside of the 529 If Needed

One Redditor left a comment saying that many people in the Chubby FIRE community overestimate how much you have to save for each child. This poster stated that they are targeting $120k per kid, which is enough to cover a 4-year education at a state university. The Redditor then mentioned that they could help out if the 529 plan isn’t enough.

Another Redditor replied to this comment by saying that elite universities are not needed in their family. An elite university isn’t the golden ticket to a prosperous career. Some people go into those universities and end up deep in debt without much to show for it. 

You can choose from many colleges and learn similar information at a non-elite university as you could learn at an elite university. The elite universities just happen to have more name recognition than the non-elite universities. 

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