Experts say this is how much you should save for college

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You've done your homework. You've researched different ways to save for college and decided that a tax-advantaged 529 plan will best suit your family's needs.

After exploring all of the different plans available, you find a plan that offers low fees and strong investment performance and decide to enroll. But as you set up your automatic contributions, you wonder, "How much should I save each month for college?"

Believe it or not, a four-year degree for your child could end up costing over $200,000 - but that doesn't mean you'll actually pay that much out of pocket. According to Sallie Mae's "How America Pays for College 2016", only 29 percent of total costs were funded with parent income and savings.

Source: Sallie Mae's "How America Pays for College 2016"

So how much should you really be putting away? Here's what three industry experts have to say:

The Magic Number for College Savings

Your "magic number" will depend on where your child goes to college, says Brian Boswell, resident 529 expert at Savingforcollege.com.

"Remember, you don't need a 100 percent solution," he said. "A realistic goal is to aim to save about 25 percent of projected total costs, but it's always better to save more."

Students rarely pay the sticker price for a degree. In fact, according to the College Board, students attending a private college paid about $19,000 less than the school's published prices in 2016-17. Boswell recommends using the World's Simplest College Cost Calculator to estimate your future costs and set up a savings goal.

"Don't get intimidated when you see the results. Worry less about saving enough and just start saving what you can, knowing that the shortfall will have to be met with financial aid and other sources. It's more important to start than to hit a specific dollar amount," said Boswell. "If you can save more, so much the better. It's never a bad thing to save too much,"

Regardless of how much you decide to save each month, the best thing you can do right now is to get started, since each day you wait you miss out on potential savings. You can always revisit how much you're saving later.

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The College Savings 2k Rule of Thumb

With the launch of a new college savings calculator, Fidelity designed the College Savings ‘2K Rule of Thumb' to help families figure out of their savings are on the right track. The rule assumes you want to pay for half of the total annual costs of attending a four year, in-state public school, and that you'll continue to save at the same rate until it's time for college. To figure out if your savings are on the right track, simply multiply your child's age by two. So, if you have a five year-old and already have $10,000 invested, you're golden.

"According to industry data, nearly half of families across the country send their children to public school, and cover roughly 50 percent of costs," said Keith Bernhardt, vice president of retirement and college savings at Fidelity. "We used this information in developing our college savings ‘2k rule of thumb' and felt the 50 percent figure also helped to simplify the discussion."

Bernhardt also recommends having a dedicated college savings account, even if you have a small budget. And if you're having trouble finding extra money to put away, he suggests digging a little deeper. Explore credit card reward programs that link to your 529 account, redirect daycare costs once your child starts kindergarten and always ask friends and family to help.

"Fidelity's annual College Savings Indicator Study has found that nearly half of parents with kids approaching college said, in retrospect, they could have saved $100 or more each month towards future college expenses", said Bernhardt.

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The One-Third Rule

Mark Kantrowitz, financial aid expert and publisher of Cappex, recommends families follow the ‘One-Third Rule', which is based on paying for college using funds from the past, present and future. With his strategy, you pay for one-third with savings (past income), one-third with current income (present) and one-third with loans (future income).

"You could try making a more precise estimate, by comparing costs with resources," he said. "For example, you could figure out a reasonable limit on student loan debt by comparing the debt with the student's annual starting salary after graduation. But, realistically, it is not possible to do this with any degree of accuracy. You can't predict job availability four years in the future, let alone 17 years in the future. So, the one-third rule gives you a rough cut that gets you in the right ballpark."

Kantrowitz also points out that college costs are likely to triple in a 17-year period. That means if you're aiming to save one-third of future costs, you'll want to put away the full cost of college the year your child is born.

"For a child born this year, that means saving at least $250 a month for an in-state public 4-year college, $400 a month for an out-of-state public college and $500 a month for a private non-profit college from birth to matriculation," he noted.

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