College Savings Plan?

DataJane · April 2012

I was wondering how many of you have started a college fund for LO? I have been meaning to look into 529 plans but haven't gotten around to it.. I'll probably still be saying it is on my to do list when he is 18 Embarrassed

For those of you who do have a college fund how much do you try to contribute to it per month?

rebelina1 · April 2012

We have a 529 plan for both our DD (that was started when she was born) and one for our DS. When they were both started we made $500 initial contributions. We now have $50 automatically deposited into each account every month. Some months if we are able to contribute more, we will manually deposit the extra funds.

We also have given deposit slips to our parents and grandparents so they can use them to deposit money into their accounts for birthdays, Christmas, etc.

Brit's Luna154 · April 2012

We started a 529 plan when she was born.

Based on our calculations, we need to save $13,000/year in the 529 plan to have enough for a typical public school (out of state). We aim to save as close to $1100/month as possible. That will get interesting when we have more than one child.

ETA: I don't recall the exact assumptions that we used, but I think we looked at the historic tuition increases of public institutions and figured out that we needed $500K+ saved for tuition, room, and board in 18 years. We based our savings plan on a fairly conservative rate of return, I think 5% and assumed an average annual inflation rate of 3.43%.

SoonToBeMsP · April 2012

Right now we are doing $200 per month minimum. I am hoping to increase by $100 each year (so $300 next year, $400 the next).

Thinkerbelle80 · April 2012

We did the 529 plan from Utah because it has very low fees and we used the age based moderate investment plan which switches the invesments from mostly stocks to mostly cash or bonds by the time they are eighteen. You can get a 529 from any state. Only choose yours if they give you state tax advantages for it. Otherwise, Utah is a good bet. Check out clark howard.com for more info on it.

chemmie03 · April 2012

My mom has started a 529 for my son and I haven't figured out what I want to do. I don't want so much money in a college fund that he will never be able to use up. So we might doa trust and college fund

kms34 · April 2012

We opted not to do a 529 but we have savings accounts for both boys. Right now we don't contribute much b/c we pay so much in daycare. We funded the initial $250 deposit and my parents put in $200/month to each account. Once we are done paying over $1k/month in daycare we will start adding to their accounts.

We are not planning on paying for their entire education but we want to help.

SoonToBeMsP · April 2012

kms34:
We opted not to do a 529 but we have savings accounts for both boys. Right now we don't contribute much b/c we pay so much in daycare. We funded the initial $250 deposit and my parents put in $200/month to each account. Once we are done paying over $1k/month in daycare we will start adding to their accounts.

We are not planning on paying for their entire education but we want to help.

You pay $1k a month for two kids in daycare? Gah... I wish I paid less than $1500 for ONE kid. Sigh.

michnthecity · April 2012

We most likely will not do one. I think there is value in my son earning his college degree on his own like I did. I did a combination of scholarships, grants, and loans. I filled out all the applications on my own very little help from my parents. And in hindsight, it was the best thing. I graduated on time and valued my education. I even went on to graduate school at my same private university on another full scholarship.

I realize this isn't the norm, but given the way the economy is, I really think my husband and I need to fund our retirement accounts first. I also want my son to realize that going to college is an investment. It is irresponsible to pursue a degree that lands you in mounds of debt and in the end only prepares you for a low paying job. The amount of student loans he should take out should be in direct proportion to the job he anticipates getting. I do plan on helping him when I visit like my mom did. She'd slip me 50 bucks here and there. Or they'd drive up and take me out to a nice dinner. Even though I always had a job, their small contributions always seemed to be just when I needed them. But putting aside thousands of dollars a year towards a college savings plan so he can "focus on his studies" does not align with our values. Most kids whose parents paid for their college and didn't work were, in my opinion, very spoiled and didn't appreciate it at all....

eklanger · April 2012

Brit's Luna154:
We started a 529 plan when she was born.

Based on our calculations, we need to save $13,000/year in the 529 plan to have enough for a typical public school (out of state). We aim to save as close to $1100/month as possible. That will get interesting when we have more than one child.

ETA: I don't recall the exact assumptions that we used, but I think we looked at the historic tuition increases of public institutions and figured out that we needed $500K+ saved for tuition, room, and board in 18 years. We based our savings plan on a fairly conservative rate of return, I think 5% and assumed an average annual inflation rate of 3.43%.

That is an insane amount of savings. I applaud you for having your child's future so well planned for, but we do not plan to cover DD's way in school. We will start saving some money to help her, but she will also have to work during school and work hard to earn scholarships/grants, and may still need to take out loans. I think there is value in allowing her to understand the value of her educational investment and make choices based on that understanding.

My experience paying for school was that my first year was paid by my college savings and then I worked while going to school for about a year before I got scholarships that covered everything and even then I still worked to pay for living expenses. In the end, I had some loans, but paid those off within 3 months of starting my first job.

caitie2002 · April 2012

We have the Mississippi 529 plan, the one that adjusts to be more conservative as LO gets older. We put $75 a month in it.

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