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My niece is 5 years old and I want to save money for her so that she does not have any difficulty when she goes into college. What can I do for this? With my meagre income I cannot save thousands but definitely $100 or so per month. Please advice me on what I can do to achieve this? Thanks for any advice or suggestion.
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First, be sure that your personal finances are taken care of. Do you have an adequate emergency fund (3-6 months worth of living expenses)? Are you debt-free other than a mortgage? Are you saving at least 15% of your gross annual income for retirement?Originally posted by Jimhassel View Post
If the answer to any of those is no, then I'd advise not to be giving money away to others. If the answer is yes, then look into 529 plans. If your state has a tax deduction for contributions, that might be your best option. Otherwise, Utah currently has the top-rated plan. You can learn more at savingforcollege.com.Steve
* Despite the high cost of living, it remains very popular.
* Why should I pay for my daughter's education when she already knows everything?
* There are no shortcuts to anywhere worth going. -
I agree with Steve. It's a nice thought, but unless everything else in your life is financially sound, I wouldn't suggest it. Your niece will be able to get grants, scholarships, loans, and student employment to make it through college. You, on the other hand, will get none of those things when the time comes for you to retire.
You could consider setting the $100/month aside, but don't promise it to her. Don't even mention it in public. If, in 13 years you're in the position to be able to give her that money, go ahead and surprise her with a nice generous gift. If you aren't, no one needs to know anything about it.
The educational plans are good, but in your case, with a "meager" income, I can't imagine that the tax write off is going to be that helpful to you -- certainly not as helpful as NOT having the money tied up in an educational account with penalties if you end up having to use it for retirement or for something else.Comment
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You also need to consider the fact that they might have more kids or you may have children in the future. With a meagre income you can't have a college fund for everyone.Comment
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I admire your being concerned about your niece and her future but like other said, you should take care of your finances first so that if you have spare money you can keep much more money for her. M bother in-law and his wife, invested on insurance while their kid is only 3 years of age. This is just to give you an idea in case you finally settled with your finances and really want to keep the kid. I think the plan is after several years they'll be able to get about $750 more or less and that's every 5 years until the kid became adult and aged 80
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This is a great idea!Originally posted by BuckyBadger View Post
Steve
* Despite the high cost of living, it remains very popular.
* Why should I pay for my daughter's education when she already knows everything?
* There are no shortcuts to anywhere worth going.Comment
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Thank u all, all the posts were very helpful. And yes, I am not promising her anything neither would I mention it to her. I hope that I will be able to save for post retirement period as me and my wife both are working and have only 1 kid with no plans of increasing the numbers. I now just need to know of any plans or insurance where I can add $100 every month for some years and get it back at some interest rate.Comment
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ABSOLUTELY NOT!!Originally posted by Jimhassel View Post
Forget about any type of insurance that sells itself as an investment. It's a scam. Avoid whole life, variable life, universal life, etc. The only kind of insurance to buy is TERM.Steve
* Despite the high cost of living, it remains very popular.
* Why should I pay for my daughter's education when she already knows everything?
* There are no shortcuts to anywhere worth going.Comment
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