Speaker 1: Adam is with us in Cincinnati. Hi, Adam.

Speaker 2: How are you? Great, Dave. Ken, thanks for taking my call. Sure. What's up? Hey. Yeah, I've got a Baby Step 5 question about saving for kids college. I've got a three-year-old daughter and a nine-month-old son, but I've been paralyzed in Baby Step 5 because I can't figure out a savings target to aim for. Now, I know how to project a cost into the future based on inflation, but there's two variables that I can't figure out how to factor into my savings target. First, I teach at a private liberal arts university, which offers a 90% tuition remission benefit. Now, I have no plans to leave in 15 years, but I don't know if I can bank on that either. And second, my parents have had a 529 set up for my kids, and there's about $35,000 in that to get us going. I have no reason to think the money won't be there, but I also don't know how to bank on that. So, in 15 years, sarcastically, I think I'll need somewhere between $30,000 and $300,000 for a kid, but I don't really know how to set a savings target. Even the SmartVestor Pro that we consulted with was a little bit stumped, so I was hoping you could help me out.

Speaker 1: Okay. I would make two assumptions, and this will help narrow your variables down. I would make the assumption that the 529 is going to be in your control, and I would ask for it to be done, for it to be turned over for you to be the custodian of it, because I have to be able to control it to put it in our planning mom and dad, and I think they'll probably do that, unless they don't trust you with the money.

Speaker 2: No, I don't think that's it. They're Dave Ramsey followers, too, so I have no reason not to trust them, but yeah, that's a good point.

Speaker 1: Then the second variable is I would not count on you being there. You might be, and if you are, that's gravy on the biscuit, but I would run my assumptions with control of the 529 and not count on the free tuition or the 90% tuition. Then from there, I would back up and say, okay, let's pretend I'm not working at this private liberal arts university. Where are my kids going to go to school? You need to go ahead and have that as your target. In our case, we said state school, in-state tuition, and dorms and dorm food. You can run the numbers on that, and you can find out what that costs today in Ohio, and you'll find it to be about $10,000 a year, roughly, maybe $10,000 to $12,000. Most of them are somewhere right in that range for in-state tuition, plus room and board, and probably another $10,000. Today, it's about $80,000 to go through, somewhere in that range, give or take. You can go look at it. You can do the actual research, and then you can add some inflation to that, and you'll be right on track. If you say, I got a brand new baby, we're going to at least double it, so we're probably looking at $200, and now you got your target. If you got one going in two years, your $80,000 is probably going to be pretty close. Somewhere in that $60,000 to $80,000 range, I'll put a kid through right now, plus or minus community college, plus or minus in-state tuition, plus or minus staying at home, and not having dorm and dorm food. You just got to look at ... You can start to make some assumptions to dial it in, but you can't say, I'm going to have no limits on where they go to school. They can spend $300,000 a year. You can't plan for that. You don't have enough money.