Sticky Rule for Parents Saving For Children’s Education

The New York Times’ Rob Lieber has a good article on saving for your children’s education. In his reporting, he talked with fellow Wisconsinite Kevin McKinley of Eau Claire-based McKinley Money:

Mr. McKinley suggests an approach he calls “20-20-20.” Take the current average cost of attending four years at a public university: roughly $60,000. Save $20,000 before your child begins college by putting aside $50 a month starting at birth and assuming a 6 percent annual return. Then, pay $20,000 out of current income while the student is in college. Finally, have your child take out $20,000 in federal student loans over four years. The $200 monthly payments afterward are not a horrible burden for people in their 20s to bear, and they’ll be debt free once the 10-year payback period is over.

This is a great example of someone packaging a solution to problem in a way that everyone to understand and act on. Now, I just need to open those bank accounts…

3 thoughts on “Sticky Rule for Parents Saving For Children’s Education

  1. It’s always nice when you can not only be informed, but also entertained! I’m sure you had fun writing this article. Excellent entry! I’m been looking for topics as interesting as this. Looking forward to your next post.

  2. A great article indeed and a very detailed, realistic and superb analysis of the current and past scenarios. I would like to thank the author of this article for contributing such a lovely and mind-opening article.

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