- Pregnancy
- Baby & Toddler
- Parents
- Getting Pregnant
- Baby Names
- Product Reviews
-
Registry
- Community
-
More
Want a personalized experience?
Download the free app
May 2011 Moms
kacelle
member
How are you saving for college?
kacelle
member
Currently, DH and I are putting aside money from every paycheck in a savings account for Violet. Obviously a basic savings account isn't the best way to save long-term, but we haven't decided how we'd like to invest the money yet. I'm hesitant of 529s since I'd like the money to be accessible for other major life events in her future if she doesn't need it for college. We'll probably save the money for her wedding and graduation/wedding gifts in the same place, so it'll be a "future fund."
How are you investing in your LO's future, and what made you choose the way that you did?
Married to my best friend 6/5/10
BFP #1 9/7/10, EDD 5/14/11, Violet born 5/27/11.
BFP #2 4/9/12, EDD 12/16/12, M/C Rory 4/24/12.
BFP #3 10/6/12, EDD 6/16/12., Matilda born 6/17/13.
BFP #1 9/7/10, EDD 5/14/11, Violet born 5/27/11.
BFP #2 4/9/12, EDD 12/16/12, M/C Rory 4/24/12.
BFP #3 10/6/12, EDD 6/16/12., Matilda born 6/17/13.
This discussion has been closed.
Re: How are you saving for college?
We have a fund set up through our state for each child (more explicitly, the MESP for you MI ladies)
We also have accounts for each child (my DH works for a bank) and whenever someone gifts us money we put it into their separate accounts.
We're going to do a RESP because the gov't adds a 20% grant to whatever we put in. He only needs to do a 3 month program by age 30 to keep the grant money.
I'm leaning toward a bonds-heavy mutual fund. Returns are around 4-6%, which isn't great but better than a savings account and pretty low risk.
Natural Birth Board FAQs
Cloth Diaper Review Sheet
Is this a pre-paid tuition fund? AL's pre-paid tuition program crashed in 2009 when tuition rates rose, and there were major lawsuits since ~42,000 people were basically getting screwed. I think the program is suspended now.
BFP #1 9/7/10, EDD 5/14/11, Violet born 5/27/11.
BFP #2 4/9/12, EDD 12/16/12, M/C Rory 4/24/12.
BFP #3 10/6/12, EDD 6/16/12., Matilda born 6/17/13.
Yes, it's a 529 plan. The same one that put my DH through school. But like I said, we have bases covered otherwise. Our financial planning is pretty extensive. I'm a CPA, my DH is a banker. Nuff' said. lol
Mommy to Rachel 1.15.06 and Ashley 5.17.11
We are putting $$ into a savings account now. We will transfer it to a 529 or Roth IRA when it's a larger amount.
We will put gift $$ into an account that she will have access to for big ticket items as she gets older.
We're doing a 529 because the state currently matches the first $400/year and it seems really silly to pass that up. It can also be used for vocational training, so that covers some additional bases.
In that case, I may be PMing you in the future. Haha. I didn't mean to say that all pre-paid plans are bad ideas, just that our state's was really poorly structured.
BFP #1 9/7/10, EDD 5/14/11, Violet born 5/27/11.
BFP #2 4/9/12, EDD 12/16/12, M/C Rory 4/24/12.
BFP #3 10/6/12, EDD 6/16/12., Matilda born 6/17/13.
No, it's definitely state-dependent. We get a sweet tax credit and it makes sense for us. It's a solid-ish system (which is saying a lot for Michigan. lol)
PM me anytime
Haha, this is actually why I don't want to set up a 529. DH and I were both offered full scholarships to every school we applied to, and we're hoping she gets our smart genes. That's my AWing for the day.
BFP #1 9/7/10, EDD 5/14/11, Violet born 5/27/11.
BFP #2 4/9/12, EDD 12/16/12, M/C Rory 4/24/12.
BFP #3 10/6/12, EDD 6/16/12., Matilda born 6/17/13.
Mommy to Rachel 1.15.06 and Ashley 5.17.11
Also, if she did get a scholarship and didn't use the 529 funds, those funds could be used for another, less brilliant child, right? Haha.
BFP #1 9/7/10, EDD 5/14/11, Violet born 5/27/11.
BFP #2 4/9/12, EDD 12/16/12, M/C Rory 4/24/12.
BFP #3 10/6/12, EDD 6/16/12., Matilda born 6/17/13.
Mommy to Rachel 1.15.06 and Ashley 5.17.11
FL prepaid is a mess right now too, not bankrupt, but is 4 times more expensive now than it was 4 or 5 years ago, so we aren't bothering.
529s have some great tax benefits, and I suggest creating one, and then perhaps also keeping another fund that is more flexible. If you daughter gets a scholarship, you can pull it out and just pay taxes (which you would on another investment anyway). It can be used for any school-related costs as well, such as room & board, or books. Not just tuition.
Beyond a 529, I recommend bond-heavy mutual funds. Or something really balanced, like a target retirement fund that is for the year you expect her to go to college, so a 2030 fund. Go with a low fee investment house (Vanguard is a good one).
FWIW - both mine and DH's background is investment accounting and finance.
Great to know! Violet will thank you later.
The extent of my financial knowledge is what I read in Dave Ramsey's Total Money Makeover, and the small amount of researching I've done online.
BFP #1 9/7/10, EDD 5/14/11, Violet born 5/27/11.
BFP #2 4/9/12, EDD 12/16/12, M/C Rory 4/24/12.
BFP #3 10/6/12, EDD 6/16/12., Matilda born 6/17/13.
Lisa - Unrelated, but I didn't realize you were a CPA. Im sitting for my 3rd section on Tuesday. Im a SAHM now, and not sure what I am going to do with it other than put it on the wall and feel fancy, but Im kind of proud of making it this far, its grueling. Are you in the field?
I passed Financial & Regulation. I take Business on Tuesday. Audit is last, Im hoping for mid November to sit. I started studying last October, and sat for the first exam in January of this year.
Also a CPA! We have a 529.
EJChapman, good luck! Fin & Reg were definitely the most difficult. Business is a breeze and Audit will be too if you have any audit in your background. When you're finished it will all seem like it was much easier than it feels right now!
I 100% agree with this. I think once you get out and work, it all makes a lot more sense than it ever did on paper
I've been out of school for 10 years now. I did 3 years with a public accounting firm, then got out of public and I'm now the accounting manager for a family-owned heavy equipment dealership. I
my job. I work 3.5 days right now and do some work from home. I just celebrated my 6th year with them!
I worked for a large (HUGE - think biggest and oldest) life insurance company in investment reporting (SEC reporting) for 4 years before leaving and becoming a mom. Im not sure what I am going to do with my license - but I like that I have so many options. Especially part time/running my own business/consulting. Its a flexible career in a lot of ways.
I do not miss corporate accounting, though I love the company I worked for (and DH manages the area I used to work for - though we were not in that dept at the same time). The hours were awful (as I am sure public accounting was as well).
Fin was terrible (not the investments section for me though). Reg - not so bad. Business definately hasn't been too bad. Its just a lot of hours of dedication
Getting those two behind me has given me a lot of momentum to keep going. Im really looking forward to be done.
And pook! I had no idea you were a CPA.
Yep! I did 2.5 years of public and have worked for one of the world's biggest companies doing SEC reporting for the past 5.5. Crazy hours, not sure how that's gonna work out with being a mom!
I would KILL to have a job like LisaFrank's....better hours, smaller, and that I love!
I kind of feel bad that I am not planning to pay for my kids college education. My parents never gave me a dime - I got scholarships, grants, and took out a loan like everyone else and was the first & only person in my family to go to college. At most, I may put money aside and if my child gets a certain GPA, I might pay for something -- tuition, room/board, something like that. But she's not getting a full ride from us.
I just knew too many people who ditched class and didn't care about college because their parents foot the bill. There's something about paying for it yourself that gives you a bit of incentive to do well...
~*~*May 2013 Moms Website*~*~
It's totally your call - but here is another alternative:
Don't pay for it. Make your kid take out loans. Then when they graduate, pay them off! My grandfather did that for me - and I learned a lot doing things on my own, but then was lucky enough to not have a $350 a month student loan payment
I might be in the minority, but I don't think there's anything wrong with that at all. I had scholarships and worked for my extra spending money...then I did student loans for grad school. Same with DH.
I can say that if something ever happens and we need the extra money (DH loses job or something) the 529 will be the first to go, as LO will always have the option for student loans. If we were not as well off as we are, we would probably not be saving. I don't mean that to be bitchy, I just mean that our income allows us to have extra to save for her - if we didn't save it, we would just blow it on unnecessary stuff, so I'd rather save.
No, I'm totally there. If the state wasn't matching our deposits to the 529, we wouldn't have one. I've had plenty of opportunity to observe students who were paying their own way and who were covered by their folks and the difference in achievement is huge.
Although one important step then that some parents forget is to make it clear to your child very early on that they are responsible. So they have time to work/save through high school, prepare for scholarships, etc. Don't spring it on them. That does happen.
I am a fan of the technique of paying off their loans if/when they graduate. But I think it's even more important for us to have our own retirement secured first. And I have much less time to get that taken care of than most of you, especially with DH not having anything of his own yet or for some time to come.
I agree. Our retirement savings is first, college savings is second. My parents helped out as much as they could with my college, but I still took out about $20K in student loans and covered the difference with scholarships and grants. My brother went to a less expensive state school, so my parents paid 100% of his college tuition. He never finished school. Though, I'm not entirely sure he would have finished school if it were on his dime either.
We did open up a 529 account, but we started with $500 and are only contributing $50 or so a month. My hope/plan is to encourage my son to save by asking him to put a percentage of his birthday/allowance/part time job money in "long term" savings (college fund), a percentage in "short term" savings, and a percentage to be spent on fun stuff.
FWIW: I paid for my own schooling and still did this. I graduated with nearly 30K in personal debt, which took me years and years to pay. I had a really hard time for a lot of years because of it.
We are doing "tax free savings". I don't think it's the way to go to get the best return, but my husband feels more comfortable with this type of savings.
I think in the end, high return/low return/whatever, as long as we have money to help our kid then we've done well.
My folks didn't ask. Gift money was left alone and it was never totaled more than $50 per occasion anyway, but it was mandatory for half of each high school paycheck and most of each PFD to go into the college fund.
That's a pretty fantastic idea. My parents paid my tuition and room/board when I lived on campus and then part of it when I moved off campus. I also graduated a semester early b/c that's the kind of kid I am.
DH, on the other hand, paid for every penny of his education and we're paying off 50K in student loans b/c he changed his major, etc. and ended up taking 7 years to finish. With some technical school and moving to another state mixed in there.
I really like the idea of the student being the one who is covering the cost of their education initially. Once we move to Alaska his AK fund money will be in a savings account for his college, but that's all I'd like for him to know about and be counting on.
Agreed. DH and I did not get any money from our parents for college. And we wound up studying hard and doing very well for ourselves. I got full-tuition scholarships for undergraduate and graduate school (including an Ivy league university). DH got college paid for via student loans and scholarships.
We want S to know that she is responsible for her way through college. Since we have money left over each month, we may set up a secret account for her, and surprise her with a really nice cash gift after she graduates college.
Natural Birth Board FAQs
Cloth Diaper Review Sheet
That is an interesting idea.
My folks paid for my entire college ed. I however, paid my off-campus living (they paid 1st year room and board, then I moved off campus for 3 years), books, food and all other expenses. My Dad also had a rule that you only got 4 years, and if you didn't graduate in that timeframe, you were on your own the extra semester or whatever it took you. My brother actually had to pay for 1 semester at the end.
My DH got no help from his folks and we are almost done paying off his loans. I feel SO fortunate to not have to deal with 2 sets of loans.
Have you guys heard of that UPromise program? What do you think of it?