Saving for College?

Clodfobble · 06-23-2005, 09:53 PM

Our plan is all our kids will work their way through college, and get scholarships and use the occasional student loans, just like the two of us did. There's absolutely no reason to pay $30,000 a year at some private school, there are tons of really good state schools out there. We're not saving anything for college.

On the other hand, when the first one turns 18, we'll suddenly have an extra $3,120 each year, and when the second one turns 18, we'll be saving a total of $11,520 a year. The cessation of child support can be their college fund.

glatt · 06-24-2005, 07:55 AM

Good question.

I'm putting most of my savings into my own (to share with my wife) retirement plan. I figure the best thing we can do for our kids is not be a burden on them when we're older. Plus, last time I looked, a parent's 401K holdings were not counted against you when you are applying for lots of various types of financial aid for college.

We also had a fair amount of money in our short term savings. We dumped a bunch of it into 529 plans for each of our kids. 10K for each kid. I don't make enough now to be saving anything for the kids' college, but hopefully that 10K will grow enough to cover the cost of textbooks when they finally get to school. I don't remember the details on the 529 plans, but they had some pretty significant tax savings. You can doublecheck the accuracy of my memory, but I think you get to deduct the money you put in to them from your income (like a 401K) and then they also grow tax free.

See this link for example, for more information.

Mostly, I'm just hoping my kids are smart enough to get scholarships.

lookout123 · 06-28-2005, 12:20 AM

i met a guy who knows a guy who once read about financial planning.

he suggests:

priority #1 always always always has to be your own retirement first. no exceptions. if you aren't fully funding your own retirement plans (401K, IRA, etc.) you shouldn't be thinking about college plans yet. Why, you ask? many students can get grants, scholarships, and loans. to date, there are no retirement scholarships.

priority #2 everything else. if college savings for your kids is something that you want to do, 529 plans are a great way to go. if you invest in the one sponsored by your home state, they are often tax deductible. but it is important to remember that not all 529 plan money managers are top notch, so it is sometimes prudent to forego the tax deduction in favor of another state's 529 plan that will give you more consistant returns. things like risk tolerance and time horizon are important questions to consider. or so i've been told. by a guy.

if you want specific info, i recommend that you inquire with a guy who knows a guy who knew a guy who met a guy who read a book. or someone similar.

melidasaur · 06-28-2005, 09:27 AM

I'm a big advocate for attending the first 2 years at a community college... it's inexpensive and there are a lot of really good ones (probably bad ones too, but that's another point). Once they have finished their first two years and required core classes at an affordable price, they can transfer to anywhere they want, as long as they pay for it themselves. You take care of the first two years - then cut the cord and have them assume some major responsibility and take care of the rest. I know a lot of people who went this route and it seems to work out. If the kids wanted to go somewhere expensive, the kids had to pay for it. If they do well at their community college, there is also a world of scholarships available to them too.

lookout123 · 06-28-2005, 10:06 AM

i, of course, went into the military to pay for it. in some states (like illinois) if you are a resident for 6 months before you enlist and return within 6 months after your enlistment you can go to any state school tuition free for the rest of your life.

LCanal · 06-29-2005, 11:25 PM

I paid into an inexpensive scheme in Canada,not sure if in US, whereby a small amount is contributed very month, if you start early when the kids are young.
You pay for the first year of university and if the grades are OK subsequent years of tuiution etc. but not living expenses are paid by the scheme.
Of course I went overseas and the plan lapsed but in theory it was good.

Had I kept it up my son would benefit now because his is going to do a masters in London and will probably go the PhD route.

06-28-2005, 12:20 AM	#3
lookout123 changed his status to single Join Date: Apr 2004 Location: Right behind you. No, the other side. Posts: 10,308	i met a guy who knows a guy who once read about financial planning. he suggests: priority #1 always always always has to be your own retirement first. no exceptions. if you aren't fully funding your own retirement plans (401K, IRA, etc.) you shouldn't be thinking about college plans yet. Why, you ask? many students can get grants, scholarships, and loans. to date, there are no retirement scholarships. priority #2 everything else. if college savings for your kids is something that you want to do, 529 plans are a great way to go. if you invest in the one sponsored by your home state, they are often tax deductible. but it is important to remember that not all 529 plan money managers are top notch, so it is sometimes prudent to forego the tax deduction in favor of another state's 529 plan that will give you more consistant returns. things like risk tolerance and time horizon are important questions to consider. or so i've been told. by a guy. if you want specific info, i recommend that you inquire with a guy who knows a guy who knew a guy who met a guy who read a book. or someone similar. __________________ Getting knocked down is no sin, it's not getting back up that's the sin

06-28-2005, 09:27 AM	#4
melidasaur Traded your soul for pogs. Join Date: May 2004 Location: Champaign, IL Posts: 646	I'm a big advocate for attending the first 2 years at a community college... it's inexpensive and there are a lot of really good ones (probably bad ones too, but that's another point). Once they have finished their first two years and required core classes at an affordable price, they can transfer to anywhere they want, as long as they pay for it themselves. You take care of the first two years - then cut the cord and have them assume some major responsibility and take care of the rest. I know a lot of people who went this route and it seems to work out. If the kids wanted to go somewhere expensive, the kids had to pay for it. If they do well at their community college, there is also a world of scholarships available to them too. __________________ I love England, what can I say?

06-28-2005, 10:06 AM	#5
lookout123 changed his status to single Join Date: Apr 2004 Location: Right behind you. No, the other side. Posts: 10,308	i, of course, went into the military to pay for it. in some states (like illinois) if you are a resident for 6 months before you enlist and return within 6 months after your enlistment you can go to any state school tuition free for the rest of your life. __________________ Getting knocked down is no sin, it's not getting back up that's the sin

06-29-2005, 11:25 PM	#6
LCanal I hope to be the kind of person my dog thinks I am Join Date: Mar 2005 Location: Sumatra Posts: 257	I paid into an inexpensive scheme in Canada,not sure if in US, whereby a small amount is contributed very month, if you start early when the kids are young. You pay for the first year of university and if the grades are OK subsequent years of tuiution etc. but not living expenses are paid by the scheme. Of course I went overseas and the plan lapsed but in theory it was good. Had I kept it up my son would benefit now because his is going to do a masters in London and will probably go the PhD route. __________________ "Happiness is like sex. In order to get any good out of it, you have to give it to someone else."

06-23-2005, 09:53 PM	#1
Clodfobble UNDER CONDITIONAL MITIGATION Join Date: Mar 2004 Location: Austin, TX Posts: 20,012	Our plan is all our kids will work their way through college, and get scholarships and use the occasional student loans, just like the two of us did. There's absolutely no reason to pay $30,000 a year at some private school, there are tons of really good state schools out there. We're not saving anything for college. On the other hand, when the first one turns 18, we'll suddenly have an extra $3,120 each year, and when the second one turns 18, we'll be saving a total of $11,520 a year. The cessation of child support can be their college fund.

06-24-2005, 07:55 AM	#2
glatt ™ Join Date: Jul 2003 Location: Arlington, VA Posts: 27,717	Good question. I'm putting most of my savings into my own (to share with my wife) retirement plan. I figure the best thing we can do for our kids is not be a burden on them when we're older. Plus, last time I looked, a parent's 401K holdings were not counted against you when you are applying for lots of various types of financial aid for college. We also had a fair amount of money in our short term savings. We dumped a bunch of it into 529 plans for each of our kids. 10K for each kid. I don't make enough now to be saving anything for the kids' college, but hopefully that 10K will grow enough to cover the cost of textbooks when they finally get to school. I don't remember the details on the 529 plans, but they had some pretty significant tax savings. You can doublecheck the accuracy of my memory, but I think you get to deduct the money you put in to them from your income (like a 401K) and then they also grow tax free. See this link for example, for more information. Mostly, I'm just hoping my kids are smart enough to get scholarships.

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