Zakat Calculation: How to calculate Zakat for college tuition or other big expenses?

I originally asked this question which I am splitting up.

College Tuition: Saving for a future expense, say kids' college tuition, does it count under Zakat's rule? Since if your kids are young, they have several years before this comes around hence will be idle, but is a significant expense and you will likely be in red for a couple of years (assuming you don't take loans to cover it).

Saving for something expensive: Similar to college tuition except probably more immediate and may involve saving more than a year. Is there any ruling? Otherwise I expect Zakat to be payable.

Zakat is money paid on "wealth". So if someone has a certain wealth for one lunar year then zakaat is applicable on it provided they cross nisaab.

Let’s say you collect for something expensive like a car or education, 2.5% is not a very big amount in the beginning to mid of the collection period, but towards the end it would get a little difficult and you would reach your target of collection a few years late.

Technically speaking not paying zakaat and collecting wealth may be even considered hoarding...which is forbidden

[9:34] "O you who have believed, indeed many of the scholars and the monks devour the wealth of people unjustly and avert [them] from the way of Allah. And those who hoard gold and silver and spend it not in the way of Allah - give them tidings of a painful punishment."

Also, based on the verse below, I recommend that people be safe and pay the zakaat rather than have to answer for it in the hereafter.

[41:7] "Who do not give the obligatory charity (Zakat), and with regard to the Hereafter, they are disbelievers."

PS: A personal advice I'd give people especially for material things like cars and homes, is to live within means. If a car or house takes years to collect (since we cannot take on interest), then it is probably not within our reach and we should may be dream about something smaller.

From the Sunnah, if you see when the Prophet (pbuh) passed away, his house didn't have oil for the lamp. Keep in mind that he was the undisputed leader of Arabia then.