How much should I put away for a child's 529 college plan each month?

Question

Whats a good contribution. Not too high and not too low but something that will put them through a decent state college.

I can put away about $300 max without severely affecting me financially.

Answer 1

You're leaving out the most important data of all ...

How long it will be before your children will begin attending college.

Think about it - if I put away $100 a month for the next 15 years - that will eventually add up to a nice sum of money. On the other hand, if I'm putting away $100 a month for just the next couple of years, that won't add up to anywhere near as much.

The question about how long it will be before your kids start attending college is also relevant to another important question - how much it might cost to send a child to college at some point in the future. The cost of a college education has been rising at a rate greater than incomes and inflation for several years - a reasonable estimate of the cost of a 4-year public university degree in 8 years would be somewhere near $100,000 - but in 15 years, that same education might well cost $170,000 or more.

There are a number of excellent online calculators that provide an opportunity to play with different "what-if" scenarios. Smart Money magazine offers one of those calculators, along with some good articles that can help you better understand the financials of the 529 plans. I've linked to that particular calculator below, but you'll find many more online. Good luck to you - I hope this helps!

Answer 2

If you can afford 300 a month, put in 300 a month.  This is a no brainer.