Babies: 0 - 3 Months

saving for college

Has anyone started some kind of savings plan to fund college?  We've been researching some options and can't decide what is best.  A 529?  Taking out life insurance and using the cash value?  Has anyone decided on either of these, or something entirely different?

Thanks :o) 


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Re: saving for college

  • My FIL opened an account in our son's name with a thousand dollars to start and then we add a little bit each month as we can afford. We try to do at least $50/ month but it depends. Also if people send him money as gifts we put that in the account as well.
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  • I work for an insurance company.  So I can share what I know about that.   

    Depending on what type of policy you buy, some or all of your cash value is guaranteed.  That means even if the stock market crashes you will still get your money. (As long as the insurance company is still solvent anyway!) Buying insurance now guarantees your LO the right to keep that insurance in the future, even if he/she has a serious illness later.  Sometimes it even guarnatees him/her the right to buy more insurance later without undergoing any health testing/questionaires.  The downfall is that life insurance with a cash value is more expensive than term insurance with out cash value.  So if LO ends up not needing the cash (gets a scholarship, doesn't go to college, etc.) it will be more expensive than it would have been to just get term life insurance and put money in a 529 or a CD. 

    I don't know as much about 529s, but I think they are basically a glorified money market account.  You contribute with post-tax money so you don't pay taxes on the gains as long as you use the money for college or other stipulated uses at the stipulated time period.  I believe some states have tax benefits if you are contributing.  The risk is that they are usually linked to something like the S&P 500 so you are taking the risk of the market crashing and you losing your money.

    With DS1 we have both a life insurance policy and a few CDs that we've opened/rolled over through the years.

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  • we have a 529 for each of the boys.  We liked that they were for education only and that if we decided to send them to private high school (or earlier) we could use it for that too.  And if either decided not to go to college they can put the account into someone elses' name (ie. their kids or each other).  My brother is a financial planner and told us that 529s were the way to go.  And DS#1 has had one for just over 2 years and it's doing really well on the investment side of it.
    Preston!
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  • image mamaHippo23:
    My FIL opened an account in our son's name with a thousand dollars to start and then we add a little bit each month as we can afford. We try to do at least $50/ month but it depends. Also if people send him money as gifts we put that in the account as well.

    All of this exactly.

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  • image Sami519:
    we have a 529 for each of the boys.  We liked that they were for education only and that if we decided to send them to private high school (or earlier) we could use it for that too.  And if either decided not to go to college they can put the account into someone elses' name (ie. their kids or each other).  My brother is a financial planner and told us that 529s were the way to go.  And DS#1 has had one for just over 2 years and it's doing really well on the investment side of it.

    Basically all of this for us.

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  • We use a 529 which our financial planner agreed with. We set up automatic monthly payments then add any money they are given as presents that isn't earmarked. Sometimes my family will designate it for something special like a toy, activity, etc.
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  • We have one of those 529 accts for DD and a savings account. We out in $50 a week to the savings plus whatever money she receives as gifts. When we get a good build up of cash in savings we transfer it to the college fund. She is 3 yo and has a good amount already. We just opened a savings acct. for DS and are doing the $50 a week for him as well. When he has a good chunk of money we will also open a college fund for him. We also tell our parents to get savings bonds as gifts when they ask us what to get ;)
  • nope. We haven't started a college fund for any of our kids as of yet. 
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  • We opened up a savings account and try to put between $50-100 in it each month, also any money he gets as gifts or in cards goes into his account. Also I get paid biweekly so any money that I have left after those two weeks I put into his account 
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