Have you started a college fund for your child/children - Page 2

mom-from-missouri · #21 (**permalink**) 09-02-2007, 09:11 PM

Mo also has another program, and for the life of me I can't think of the name of it right now...But, students earn dual credits while in high school-so that when they graduate from high school, they also have a 2 year associates degree.

Tree0164 · #22 (**permalink**) 09-03-2007, 05:07 AM

We are saving in a 529 plan. Only $50 a month for each of the kids. I am thinking of stopping it on one of my sons since he is autistic and just funding a special needs trust for him with mutual funds since I doubt he will be going to college.

herm4 · #23 (**permalink**) 09-03-2007, 06:53 AM

Lucky Robin,

I didn't mean "just a Technical school", I meant "just a couple of options of schools ". That is how I took your post. Sorry for the misuderstanding. I am aware that lots of people do really well from technical schools. I actually have a degree from a technical school (Respiratory Therapy) and it paid the bills for alot of years. My brother is a pilot for a major airlines, he never graduated from college and makes about $350k a year. I know there are lots of options, I just don't want my children to limit theirs based on finances. Which is exactly what happened to me. I went to a cheaper school, got a job that really wasn't what I wanted to do, all because it (the school ) cost the least. I guess we will have to agree, to disagree.
But, I have enjoyed the debate also!

learning to live well without spending alot of money

FrugalFish · #24 (**permalink**) 09-03-2007, 07:50 AM

My DD is only 18 months. Finances are tight for us right now, but we will put a little aside here and there. We just cashed out a small whole life policy that DH had (very small) and that will be the real start of her savings. Plus MIL said she had a small amount she wanted to add from a small inheritance she just received (not holding my breath about seeing it.)

We'll save money for her college, but not a lot necessarily separate from our other savings and investments. What we pay will depend on if/where she wants to go to school and how motivated she is. If she turns out to be a very bright, go-getter, I won't let a lack of funds be the thing that stops her from achieving her goals. OTOH if she's not really sure of her direction, perhaps it's better for her to let her tough it out and figure it out on her own. I can always go back to work for the sole purpose of financing her college.

MonkeyMama · #25 (**permalink**) 09-03-2007, 08:55 AM

I am mostly with Lucky Robin as that is how my family is.

My parents raised me with the value of money from a young age, yes, that is why putting myself through college was not a huge burden. Working through college? I didn't find it took away from the experience at all. I was in the clubs and worked, and even took 1 month off every year just to veg. It can be done. But since it has worked for our family that is how it will be for our kids (as their parents and grandparents before them who worked their way and paid for their own college).

I am a lot with FrugalFish as well. We are saving money, but I am not going to save a ton up in the kids' name. We expect them to do it on their own but we'll be there to help. We are open to the fact that they may not be able to work as much as we did through college, or that they might "need" a pricier degree than those before them (my dad is an engineer and I am an accountant and we went to community college/state and hardly spent anything on our degrees, but these are well-paying careers.). But since we have saved so much money on college the past 2 generations I am not too worried about them. They will have opportunities and resources tenfold what we had. It's not in their name specifically because they aren't entitled to squat. But if they "earn" it we will have plenty of means to help them. The idea of expensive college doesn't scare me too much because we didn't have to pay much to get well paying jobs and certainly have the money to help them (much more than our parents did, etc.)

For now we save $25/month for each kid and imagine it to be plenty. It's in their names to avoid taxes and grandma has a 529 with way too much money in it (more than my whole college cost pretty much - books and all). So regardless how we feel they will get oodles of money for college it seems. But if the money is there, so be it. My parents told me they would help me for college but not if I lived in the dorms, went to private school, didn't work and contribute, etc. So it will pretty much be the same for our kids. We just have some of the same expectations. We don't want them to run up a ton of debt and we aren't going to shell out six figures for their education. But there are a lot of other ways to approach it. (In my case my parents would have helped much more but I didn't ask for it/need it. It is a great feeling to be able to take care of yourself. Sure college was HARD but it also made me very strong. I wouldn't want to take that away from my kids).

Oh it probably doesn't help that I know way too many peers who squandered their fancy degrees and partied all through school (that is an expensive party!!!!). Most of the problem I see was parents eager to mortgage their home so their kids could go to the BEST Schools though they had no idea what they wanted to do. IT was really more of a parental pressure thing than a lazy kid thing (somewhat the culture in the area - a lot of successful parents who push their kids way too hard). So if I am going to help my kids become a doctor or something I want to sit back and make sure that's REALLY what they want. If they don't know what they want to do they can work and go to community college while they think about it. Anything more would really be a waste if you ask me. I know SO many people who went to fancy schools for degrees they will never use and then had no money when they figured out what they wanted. They were snobby to me that I went to State and that is where they ALL ended up for Masters and "real" degrees. Ironic. I rather the kids take their time at State and C.C. and then go to that fancy college when they are sure what they want out of life.

PrincessPerky · #26 (**permalink**) 09-03-2007, 10:43 AM

That last paragraph regarding the 4 year party, is exactly why I wont 'require' my kids to go to college, if they choose a career that needs college then of course they need to go, but I am not paying for a 4 year party, just cause they are doing as directed.

Actually even if they study the whole time, I don't want my 18 year old doing what I said...I hope to raise them well enough to make the choices they want for the life they want (college certainly doesn't help me run a house and home educate!)

Though I have to say that if I had more money I would put more away for my kids (or rather give them an allowance or job around the house or something..prolly 'side job' so GMC would get more money, and UE wouldn't get any yet. and of that money they would be given the chance to practice the habits of donating/saving, and spending)

Exile · #27 (**permalink**) 09-03-2007, 10:32 PM

I don't have kids but I would like to weigh in on this matter anyway.

Personally, I believe parents have the responsibility to do whatever they can to help put their kids through college and to begin saving for this time several years before the time comes. After all, a college degree is no longer a luxury. This is not to say that students should just sit back and not do their part. They can also beat the bushes for financial aid and work during the summer. But they do not need the distraction of worrying about finances while they study, and knowing that their parents are behind them is a great psychological boost as well.

For those parents who have no intentions to help put their kids through college, please let them know as early as possible, i.e. when they are still in elementary school. The least you can do is contribute by working with your kids in seeking scholarships and other forms of financial aid. From the time I was in grade school, my parents led me to believe that they would fund my college education. But right after I graduated high school they informed that they weren't going to assist me after all. They had never put away money for this purpose. They just thought they could improvise when the time came.

Interestingly, here in the Philippines, which is supposedly a "poor" country and has many social flaws, one cultural practice that I do admire is that parents do whatever they can to pay for their kids' education, and their children for the most part are grateful for it. Consequently, pre-need plans for college are big business here. By way of contrast when I was growing up in the U.S. the ony pre-need plans I ever heard about were for burials.

Over the years as a working adult, I acquired about 2 years of college credits. But I did have the satisfacation of helping finance my wife through her bachelor's and master's degrees. What more so must be the feeling of pride for parents who have done the same for deserving family members.

Scanner · #28 (**permalink**) 09-04-2007, 07:53 AM

I think a moderate compromise here is possible and one I adhere to.

I have told my 10 year old that we will pay 2/3rds of his education. That will essentially be tuition, fees (which appear to go up every year so they don't raise tuition) and car insurance for a clunker/bomb. He will be responsible for the other 1/3rd, which is books, room and board, and spending money.

That shouldn't stress him too much and I figure will amount to a 10-15 hour/week part-time job during the school year and 40-60 hours/week during the summer, which is doable for an able bodied, male 19 year old.

Besides, unless he plans to go to professional school, I'd rather see him work part time and get a 3.0 or even a 2.7 than not work and get a 4.0. Nobody looks at your GPA (besides medical and law schools). . .but every employer considers your work ethic.

Essentially, a degree is a degree is a degree.

And fiscal responsibility is a skill that everyone needs to have - and it starts with an awareness of how much something costs.

We have about $18,000 in a 529 and Education IRA's for our 10 year old and 4 year old

Yes, we are behind. At least I feel so.

herm4 · #29 (**permalink**) 09-04-2007, 08:02 AM

My neighbor uses a scale to determine how much tution she will pay for her child. It is something like this:

100% for a 4.0 grade pt. average

75% for a 3.0 or greater

O% for less than a 3.0

Seems to be working. Her daughter is very determined to keep her grades up and not pay the tution!

learning to live well without spending alot of money

PrincessPerky · #30 (**permalink**) 09-04-2007, 10:22 AM

Quote:

Originally Posted by Exile

....., please let them know as early as possible, i.e. when they are still in elementary school. The least you can do is contribute by working with your kids in seeking scholarships and other forms of financial aid. From the time I was in grade school, my parents led me to believe that they would fund my college education. But right after I graduated high school they informed that they weren't going to assist me after all. They had never put away money for this purpose. They just thought they could improvise when the time came.

I want to second this tell them point. Not just in elementary, but whenever you get the chance, 1, 3, 5, or 11, 13, 15, or 21, 23, and 25. Whatever, tell your kids what the deal is, while I understand understating your monetary availability, ala Missouri, I do not understand overstating it.

Regardless of your financial situation honesty is always a good policy. IMO

eisor · #31 (**permalink**) 09-04-2007, 01:50 PM

I definitely agree that you need to make sure your child knows what your plan is for their post-secondary education. My parents made it completely clear that there was no money coming my way for college. They said they'd help as much as they could, but not to rely on them. I've seen maybe $1000 total from them, if that. But, I knew that was the case going into it. Thankfully, I live in a state that has the HOPE scholarship. A lottery funded scholarship available to ALL Georgia graduates with a certain GPA (and maintain a certain GPA). It is redeemable at any Georgia public university. I think you can also use it at technical colleges (but I'm not 100% sure). The scholarship covers tuition & fees and a book allotment each semester. Between the HOPE scholarship and working part-time (and sometimes full-time) I've been able to put myself through college. I'm almost done and I haven't borrowed a dime!

For those of you saving for your children's college education, I'd definitely put some contingencies on it. I'm not talking about controlling their every move because you are giving the money. But, require them to maintain a good GPA or be enrolled a certain amount of hours each semester. I know a ton of college students who took advantage of the fact that their education was being paid for. Definitely didn't teach them anything about responsibility. Many of them dropped out. Others graduated, but since they never had to work or manage their own money, they were lost when they graduated. Didn't know how to cope in the real world.

disneysteve · #32 (**permalink**) 09-04-2007, 02:24 PM

Quote:

Originally Posted by herm4

100% for a 4.0 grade pt. average

75% for a 3.0 or greater

O% for less than a 3.0

I hope she isn't quite that strict. Paying 100% only for total perfection seems a bit extreme. Not many students achieve a perfect GPA for all 4 years.

Speaking of 4 years, another good point is that you should make it clear to your kid that college is a 4-year endeavor. Not 5. Not 6. Not 8. I'll cover my daughter for 4 years of undergraduate school. If she decides to change her major 6 times and needs 5 or more years to earn a degree, she's going to have to foot the bill, or at least a much bigger piece of it.

herm4 · #33 (**permalink**) 09-04-2007, 02:51 PM

Quote:

Originally Posted by disneysteve

I hope she isn't quite that strict. Paying 100% only for total perfection seems a bit extreme. Not many students achieve a perfect GPA for all 4 years.

Speaking of 4 years, another good point is that you should make it clear to your kid that college is a 4-year endeavor. Not 5. Not 6. Not 8. I'll cover my daughter for 4 years of undergraduate school. If she decides to change her major 6 times and needs 5 or more years to earn a degree, she's going to have to foot the bill, or at least a much bigger piece of it.

Yep, she's that strict, she also won't let her girls wear make-up, get their ears pieirced, go to a school dance untill their eighteen, etc....etc..... I could go on and on.......

learning to live well without spending alot of money

skydivingchic · #34 (**permalink**) 09-04-2007, 07:09 PM

I don't and won't have children, but I wanted to chime in with what my parents did with my brother and I.

From the time I started working - babysitting, mowing lawns, hotel maid, etc - I had to put 50% of my earnings in a savings account for college. Money I earned working full time during the summers while in college also got socked away for the upcoming year.

My grandparents on my Mom's side always gave us savings bonds for our birthdays, Christmas, etc. My parents also managed to save a few thousand in mutual funds for each of us.

When college came around, we were expected to apply for all scholarships we were eligible for. I worked part time in a job in my field during the school year (10 hours per week). That money paid for my gas and spending money. Between the saved money, scholarships, and some additional from my parents while attending college, I was able to earn an engineering degree at a public school. The very last semester I did have to take a small loan (just over $2000).

The system worked well for us and I'm extremely grateful to my parents for helping as much as they did. DBF's parents were not in a position to save money for his education. He also graduated with an engineering degree, but far, far more debt. He is still paying 7 years later, while mine was wiped out in a couple years.

asmom · #35 (**permalink**) 09-04-2007, 08:26 PM

Quote:

Originally Posted by Scanner

I think a moderate compromise here is possible and one I adhere to.

I have told my 10 year old that we will pay 2/3rds of his education. That will essentially be tuition, fees (which appear to go up every year so they don't raise tuition) and car insurance for a clunker/bomb. He will be responsible for the other 1/3rd, which is books, room and board, and spending money.

That shouldn't stress him too much and I figure will amount to a 10-15 hour/week part-time job during the school year and 40-60 hours/week during the summer, which is doable for an able bodied, male 19 year old.

Besides, unless he plans to go to professional school, I'd rather see him work part time and get a 3.0 or even a 2.7 than not work and get a 4.0. Nobody looks at your GPA (besides medical and law schools). . .but every employer considers your work ethic.

Essentially, a degree is a degree is a degree.

And fiscal responsibility is a skill that everyone needs to have - and it starts with an awareness of how much something costs.

We have about $18,000 in a 529 and Education IRA's for our 10 year old and 4 year old

Yes, we are behind. At least I feel so.

I must agree with Scanner wholeheartedly here. I do think there is a middle ground between "I'm not saving one penny" and "I owe them a 4-year ride". My plan is to pay 50% of my daughter's costs, with her paying 25% of it as she goes, probably through part-time jobs and the such and maybe getting loans for the remaining 25%. I hate for her to start her adulthood in debt but I also feel that she should have a financial stake in her future. I also plan for her to apply for every scholarship possible and hopefully, she will get the HOPE scholarship offered here in GA but I am not counting on those things as they keep moving the target for that one. Unfortunately, I am waaaay behind; I have a small 529 but I was doing my budget just today and I have a plan to catch-up.

Scanner · #36 (**permalink**) 09-05-2007, 07:10 AM

25 Rules to Grow Rich By | 25 | Money Magazine

Rule #14 from Money suggests accumulating 1/3 of college costs in money.

This may be wise because the more you accumulate and save, the more likely you will be penalized and not qualify for financial aid.

My accountant, who is also a CFP, while not really doing a financial plan for me. .. just kabitzing with me, has suggested locking your wealth up in your house as I beleive it doesn't count towards the amount of wealth you have when you fill out the FASFA form or whatever it is.

Like Money suggests, you can then pull it out if you need to or maybe financial aid will pick up the 1/3 to 2/3rds in the air.

It's another reason I prefer "debt reducation" vs. "bond accumulation" when making a portfolio when aiming for the debt sector investments - the bonds can and will be held against you in a court of law. Your house won't.

It's a tough decision - what you do now affects what you get down the road and the stakes are high.

I guess I"ve decided I'm uncomfortable depending on the gov't one way or the other to provide and thus am aiming for 2/3rds cost.

BTW, DisneySteve, with summer jobs and not paying for winter semester, this often means a 4 year education ='s a 5 year time to complete. I can recall when I majored in biology at the U of D, it was practically impossible to squeeze in 15 credits per semester with labs. So I ended up with 14 most of the time. I worked on winter breaks and summer. It took me basically an extra semester and one semester part-time to graduate.

avengerki · #37 (**permalink**) 12-17-2007, 12:45 AM

I have two children and I put a little under a percent of each paycheck into a savings for each. My goal isn't to pay off their entire school but to pay about 25-50% of it.

I never went to college, I went into the military instead. I did watch my sister work three full time jobs plus going to college full time and don't want my kids to have to deal with that. I could never figure out when she could sleep, although she now pulls two full time jobs and a part time with a husband and child.

Saving in So Cal · #38 (**permalink**) 12-17-2007, 02:11 PM

I paid for undergrad and graduate school on my own and my husband did, too. So, we know our child could do the same if need be. That being said, I routinely run into people that have over $120k in student loan debt and I don't want that for my child.

Our compromise is to put $100 a month into the state's 529 plan. This is money that would otherwise go into a 401(k)/457 plan; however, since I am vested in a public retirement plan, we feel like we can spare this much without sacrificing our retirement security. We also add our spare change, any monetary gifts she receives, Upromise rebate moneym and any small amounts of unexpected money we receive. The experts say we need to putting away $300 a month if we want to pay the full bill. With our fixed amount and the little extras, we're saving somewhere between 1/3 to 1/2.

disneysteve · #39 (**permalink**) 12-17-2007, 02:44 PM

Quote:

Originally Posted by Saving in So Cal

I paid for undergrad and graduate school on my own and my husband did, too. So, we know our child could do the same if need be.

While I respect the sentiment, keep in mind that the reality is that college costs have risen far faster than inflation and far faster than typical income. It is much harder for a student to work his way through college today than it was when I went to school 20 years ago. It is still possible, just more difficult.

mom-from-missouri · #40 (**permalink**) 12-17-2007, 03:00 PM

I agree with Steve. My dad who has 2 degrees went to school for $20 a semester. His books were another $3 a semester.
My total college bill for 4 years at a state college was just under $7000 TOTAL.
DD#1 pays $8600 per semester now at her full time college, and she is doing a double major and taking 1 class at a junior college because it isn't offered at hers when she has a free hour. At the junior college it is another $600. Luckly, she is on full scholarship at the full time school and got the Bright Flight. So, she gets the bill, but does not have to pay it. She graduates this coming May. This semester she took 18 hours. Next semester she will have 21 hours. 4.0 GPA and she works 30 hours a week. YES I am bragging. She has a work ethic and stick to it attitude. She is only 20 and had an early out from HS. Getting 2 four year degrees in 2 1/2 years. Her classmates think she is odd because she studies instead of drinking......