Estimating the costs of post-secondary education is influenced by a couple of factors. First, you must correctly identify the education program to be pursued and, second, you need to estimate how many years before you begin the education program.
If you have identified the area of studies you wish to pursue then you can easily and accurately identify the specific costs of tuition, books, lab fees, tools, accommodations, etc. With this information in hand you can make a good estimation of the total costs involved in completing the program. On the other hand, if you are uncertain as to which program of studies are to be pursued, then it becomes virtually impossible to estimate the costs and you may simply have to make a rough guess so that you have a dollar amount to focus on (for example, a 2-year diploma at your local college may cost $20,000.00, whereas a 4-year undergraduate degree may cost as much as $80,000.00 or $90,000.00).
Note: The length of time before your studies begin is important to estimating costs because rising costs will affect your estimate if you are saving many years in advance. For example, in 1999 the average cost of tuition in Canada was $2,591.00, but by 2021 this cost had risen to $6,373.00 – a 145% increase!
Below is a chart that displays the average costs of tuition in Canada.
One method of estimating your potential education costs can be accomplished by completing the Education Expense Budget provided in the InvestingForMe Tools section. By completing the budget as if you were pursuing your chosen field of education today, you can make a good estimate of your current costs. Once you have the calculated the cost of the program today, you can then use the Education Savings Plan calculator to calculate an estimation of these costs for any date in the future. For example, if you are a parent trying to establish an amount you need to save for your child’s education in 15 years, by simply using the Education Savings Plan you can plug in this cost estimate, an estimate of inflation and the number of years into the calculator to create an estimate of your education costs into the future. This estimate of the future costs is a reasonable estimate of the amount of funding needed to pay for the education program.