1st Baby Due 10/2022 = Saving for childs future, but where to start these days?

[Fishindude77]

Congrats !
Best thing you can do for your kids is to have your own finances in good shape first, so they don't have to financially care for you later in life.
If you are doing all of that and have excess cash to invest for the kids, good mutual funds such as you would use for yourself are a great choice. 529 Plans are good, but that narrows down what the money can be spent on, and not all kids will go to college.

[rennigade]

We stick $200/month in a 529. Also started funding index fund under wife's account specifically for child. Grand parent gifted us $30k so we're slowly sticking $1k/month into that fund. Will give it to him later in life.

[LivingAlmostLarge]

MESPsounds good. How much are you thinking of investing for the kid? That would also influence where and how much? $1k month in taxable and $1k into MESP? Or less or more? I think if it's more then i would divert to taxable because you don't want to overfund college. You can always use a taxable account to fund college but why take a penalty for saving too much.

[amarowsky]

MESPsounds good. How much are you thinking of investing for the kid? That would also influence where and how much? $1k month in taxable and $1k into MESP? Or less or more? I think if it's more then i would divert to taxable because you don't want to overfund college. You can always use a taxable account to fund college but why take a penalty for saving too much.

Not really sure..... Kind of depends how much surplus I earn in the child's younger years (I work on commission + what my investments/business bring in) + my wife's fixed corporate/W2 salary.

Wife and I both have undergrad degree's. But I'd be lying..... in 2022, it is not at all "obvious" that his is THE ONLY way to prepare ones career life going forward in USA culture. Especially because the target for my primary business, is starting to change from R.E. holdings/rentals --> into more of a building/contracting company. There may be opportunities I'm able to provide the child, with greater value possibilities than the Degree/W2 (work for someone else route).

But the above totally depends on the child's personality, as it emerges.

ALL THAT SAID:

I think $500-700 a month would be a solid target. At least for some years.
*note - on bankrate, 500 per month, for 18 years, with 8% APY (seems "safe enough" as it would be indexed) = $232k.... perhaps Far to much to be saved for an tuition cost that may not be utilized.
**If I do 500/month for 10 years = 90k @ 10 years ($166k with $1 per month after another 8 years) .

Either of the (2) below seem fine for a nice "starting point" for a kiddo. W/o earmarking "too much" towards something that may not be utilized (in all likelihood, will be though).

Tons to think about! I fully intend to provide & safe resources earmarked for this child. Thank you guys a bunch for weighing in + providing info/opinion/experiences!

[LivingAlmostLarge]

I found that I did not save as much as I had hoped and it turned out okay. Saving $2k/year for the past 12 years has lead to about $50k. That's nothing to sniff at. I'm not sure where we will end up but i invested in VTI the entire way and it's still there

[kork13]

Personally, I don't want to save an excess of money in the 529s for our kids. I'm planning to cap out those contributions around $3k/yr (currently closer to $2k/yr), with the goal of ending up with around $100k (today's dollars) by the time they each go to college, or trade school, or otherwise. That should cover much of a 4-yr degree, then they'll have the UTMAs or scholarships or other income/investments to cover anything else. I just don't want to end up with a bunch of money trapped in a 529. Sure, it can be repurposed, but I like keeping things simple.

[henry90]

Congratulations!

Credit union account
capital one account.

Also, MESP definitely seems like the best option for school expenses.