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February 2012 Moms
emschott
member
Savings for LO?
emschott
member
DH and I want to start something more formal for the babies in terms of savings accounts or an account for future college expenses, but we aren't sure where to start or what's best. Right now they each have small amounts in their own accounts that I started a few months after they were born. What is your savings plan for LO? Do you have a 529? Do you work with a financial planner? How much do you set aside each month?
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Re: Savings for LO?
However, I'm hesitant about the 529s because a lot of them will penalize you BIG time if they don't go to college. If someone can recommend one that doesn't have a big penalty, please share!
We set up a 529 for both of our kids, but I think there are a lot of different options. The biggest decision I found with a 529 was to decide whether you wanted to go with your own state's 529 or another state's 529. You can find out which state's 529 perform the best and go with that one, or if your own state offers a tax benefit to go with their 529, it might make the most sense to take the tax benefit and go with your home state's 529.
We worked with a financial planner. The numbers he projected for school by the time our kids go to school made me cry a little, but we try to save about $10,000 per year for each of their 529s. We figured we would front load the accounts and save big now, so the money has a chance to grow. I don't think we plan to continue to contribute quite so much as the kids get older.
My parents paid for college for me, and I think it made a HUGE difference for me and my life, and I am SO appreciative of it, so I would like to do everything I can to pay for my kids college education too, even if it means some sacrifices now.
I really hope/think that the expense of college education cannot continue to rise at the same rate it's been rising for the past decade or so, so hopefully there will be enough in each of my kids' accounts for college, and maybe we'll get lucky and they'll get scholarships!