Over their lifetime, college graduates gross $1 million more in earnings than their less educated counterparts . Education helps people both gain and keep wealth. But paying for it can be daunting, especially if you have to pay all at once. For some families the price tag exceeds the cost of their home. Thus, starting a savings plan early is critical. Fortunately, compounded savings eases the financial burden.

Saving for college requires time and money. The more you have of each, the better. Time puts the miracle of compound interest on your side. And the more money that is earning money, the less you need to continue contributing. The earlier savings begin, the more manageable the monthly amount that should be saved.

Over the next 18 years, total annual costs of college may grow from $30,326 to $74,451 for in-state (Virginia) public universities, $43,990 to $107,996 for out-of-state public universities, and $58,700 to $144,109 for private universities.

In 18 years, total four-year costs may be $297,802 for in-state (Virginia) public universities, $431,983 for out-of-state public universities, and $576,436 for private universities.

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These projections assume a 2.86% average real return of invested assets over the inflation rate of higher education costs. The investments gradually become more conservative as college approaches.

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The lump sum savings can be daunting, but saving a little every day is very manageable. Started young enough, saving and investing even $1 per day could pay the tuition at many public schools. By investing in a college savings plan, your money can grow faster than the inflation rate of higher education.

As part of our College Planning service, we help our clients meet their college funding goals by designing age-specific portfolios in tax-efficient 529 college plans. Our work for each client is tailored to meet his or her specific college savings goal. We then monitor and annually rebalance each account to ensure savings and investments are on target to meet educational funding goals.

Saving for college is a critical part of financial planning, but saving for retirement is even more essential. You can borrow money for college but no one will loan you money for retirement. By default, we recommend prioritizing your own savings plan over your child’s college savings.

For many of our clients, it is the grandparents who are secure enough financially to be able to fund their grandchildren’s education. The added benefit of having a grandparent own a 529 plan is that these funds are not counted in the formula for financial aid.

Our College Planning service is currently reserved for our Comprehensive and Collaborative service level clients. However, we offer 529 account management at all of our service levels. This service includes asset allocation design and ongoing investment management services for managing 529 accounts hosted at College America.

Regardless of whether or not you are a client of our firm, we recommend utilizing 529 plans for your college funding goals. Here in Virginia, not only do you get a state tax deduction for contributions if you pay Virginia taxes, but the Virginia 529 plans are some of the best 529 plans in the country .

For more information on the College America and the Invest529 plans, visit Virginia529.com.

Photo by Katie Emslie on Unsplash. Image has been cropped.