What you need to know to avoid sticker shock when it’s time to pay for your kids’ college.

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It’s no secret that college costs have soared over the past decade, leaving freshly minted graduates with an average of $29,800 in debt and their parents saddled with an average of $35,600 in federal Parent PLUS loans.

As public debates continue to discuss the future of accessible education, parents want to make sure that they’re prepared for all possibilities, including the possibility that college costs will continue to climb higher.

If you want to be able to offer your child every educational opportunity possible, here’s what you need to do to make sure you’re saving enough.

Use current costs as a guideline for your future expected costs

While you won’t be able to perfectly predict how much tuition will cost by the time your child is ready to go to college, you can use current costs to guide your estimates.

First, consider whether you expect to send your child to a public or a private college. Tuition for a private non-profit college averages $35,830 per year, while tuition at a public college averages $10,230 per year. Note that those figures are for tuition only, and do not include room and board.

Multiplying these costs by four isn’t enough to get you the total number you’ll need to come up with, because you’ll also need to take inflation into account. Over the past decade, tuition and fees increased by about 3% each year, adjusted for inflation.

If making those calculations sounds complicated, don’t worry; there are plenty of online tools that help you figure out how to get to the right number, like TCF Bank’s Savings Calculator. The calculator lets you adjust your contributions to see how close different amounts will get you to your overall goal.

Understand that saving 100% of expected costs may not be realistic — or necessary

Don’t forget that you don’t need to save 100% of the expected total cost of tuition. If saving the entire amount is unrealistic for your budget, many experts suggest splitting the total cost of tuition into three parts: money that will come from your savings, money that will come from your current salary and financial aid, and money that your child will receive from loans or scholarships.

In general, a common approach known as the “one-third rule” suggests that one-third of tuition costs should come from each of the above categories. That means that you would aim to finance just one-third of total tuition costs from savings.

The rule is a good place to start, but for more specific guidance that takes your own personal circumstances into account, you can talk to your financial advisor.

Talk to your financial advisor about different banking options

As soon as you’re ready to start putting aside money for college and you’ve set your goals, talk to your financial advisor about next steps.

A 529 plan, for example, lets you invest your money without paying taxes on any subsequent growth, so long as you use that money for qualified educational expenses. That results in substantial tax savings and helps your money go further. You can also learn more about 529 plans through TCF Bank’s Financial Fitness Program.

If you’re not ready to commit to a 529 account, another way to build up your college savings over time is to set up an automatic deposit into your savings account. Making weekly or monthly deposits into your savings account will help ensure that you can build up slowly. Before you know it, you’ll be off to a great start.

Another tip you can explore is to use your saved money to buy a Certificate of Deposit (CD) a year before your child heads to college. Moving your money to a CD lets you lock in a higher interest rate, and makes sense if you won’t need to access the money until college starts.

Once again, your financial advisor can make specific recommendations on which approach can offer you the most advantages.

Don’t be afraid to get started

Don’t let the numbers overwhelm you. No matter how much you save, the most important step you can take is to simply get started. The sooner you begin, the sooner you’ll be able to watch your savings grow.

For more information about smart ways to save for college, visit TCF Bank at www.tcfbank.com.

Members of the editorial and news staff of The Detroit News were not involved in the creation of this content.

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