Suggestions appreciated

[moneygrabber]

Here is the way it is. I am a cop and my wife is a private school teacher. My salary is around 100k (occasinally a little more with overtime). My wife's is 33k. Average monthly take home pay is approximately $7,000 per month (it used to be a lot more, but my overtime at work drastically cut...and also, even though I do not have social security deducted, I get a larger percentage deducted on the gross maonthly pay for the nice pension I get when I retire).
We have 3 boys...14, 9, and 8. Our mortgage is 280k ($2979 per month...which includes property taxes and homeowners insurance (rate is 4.25% so not really feasible to refinance and not sure if the current values would work for it), car loan ($390 per month), utilities (about 375 per month average...all electic house), life insurance on me and wife ($225 per month), cable/intenet/phone $165 per month, cell phones $180 per month (most of this I can write off), gas for cars (this is the killer.....$600-$800 per month). My wife's car is an older large car with a third row for the growing kids, but I have no car payment on it. The down side if that It has a lot of maintenance issues (brakes, tires, oil etc) that average every three months and vary in amount...but no car payment. Groceries to feed us and 3 kids is a lot...at least $700 to $800 per month. I also put in college fund for all 3 kids....only $75 per month but better than nothing. I also have a co-pay of $100 per pay for medical insuance ($200 per month).
Just like a lot of people, I was living the high life, especially when the overtime was endless. But just as the economy went bad, I had a few issues as well....Needed new roof last spring, That was $800. Then in the summer the heavy rains last year caused flooding in our basement (basement was finished before we bought home). That cost $3k and homeowners refused to cover it because it was a basement. This was the real killer.....a second trpoical storm made it here and the basement flooded again...worse this time. This cost 6k. What I did was have these 3 home repais put on a 0% credit card (minimum payment is $190 per month, but I have been paying extra to try and knock it down some). The problem is this rate is going to end in about a year. I could probably transfer it over to another 0% since my credit is actually rated as terriffic and it this truly is the least of my worries.
I have 4k in savings and a son starting college in a few years. His 529 has 8k in it which is not that much. He is an honor roll student and a pretty good athlete who is also involved in the community. My main concern is making sure he gets a college education and wonder how I would ever be able to afford a good college. I think I make too much for him to get grants, and although he may get some types of partial scholarships, I am sure I will have to fork out a lot of money. I am sure I am not the only person in this predicament.
I have a pretty good job with job security and am guaranteed raises of 4% the next two year and 4.5% the year after (I know, not too bad in this economy). Also, when where I work we have the drop program that can be used up to the last 5 years of employment).
Some say that if my credit is good my son should be able to get goloans for school...others say leave the credit card debt there and he will get loans or grants and I even heard buy a nice car because tless money I have will mean more loans or grants for him. I do not want to base anything on "rumors" to get college for the kids. Any suggestions will be greatly appreciated.

[Slug]

Well, you're doing a lot of things right. Is your mortgage a 30 year? The rate seems extremely high. My mortgage is slightly larger and half the price without taxes and insurance wrapped in. A re-finance to a 30 yr if you don't have one already would open up cashflow.

As for your son, just fill out the FAFSA forms. He should be eligible for all the loans he needs. The 529 plan will help too.

[J.Apple902]

My first thought is okay you bring in $133k a year yet only have 4k in savings? What do yo have for retirement? I understand you have the pension but I would imagine it'll be better to have more. And yes you have three kids to put through school. ABC states the average costs nowadays for room and board and public university in-state tuition are $17k / yr. Public College Costs Surge 8.3 Percent - ABC News

[DebtFree&Broke]

1. Start by cutting your budget -- You bring home $7,000 a month, you should lots of money left at the end of the month. Replace your whole life? insurance w/ term insurance. It's easy to cut your grocery spending to $25 per person per week, that's $550 a month. You have to decide what are needs or wants. Find how you can save money on the needs and decide what wants are worth your money.

2. Save $1,000-$2,000 so when your cars or home need small repairs you have some money available. If you already have $4,000 in savings then you have this covered. Take $2,000 out and throw it at your loans.

3. Send all the money you can to pay off your car and credit card. I'm guessing that your credit card balance is lower than you car loan. If you can send a $1100 payment every month your $9600 credit card will be payed off in less than 9 months. Then add that $1100 to your $400 car payment to knock that out too.

4. Add $14,500 to your savings so you have 3 months expenses set aside for emergencies -- you'll never have to use a credit card again. That will take about 10 months.

5. Now you have at least $1,500 a month for your kids school savings and your own savings. If you save $1,500 a month for your sons school you can have $36,000 saved in two years.

6. Don't raise your lifestyle to match your raises. Save the money or throw it at your mortgage.

[moneygrabber]

Thanks for the quick responses. As for the savings, I know I could have more. The pension will be after 25 years of service I will receive 75% of my highest 3 years. The drop program is another enticement. An example would be in 2012 John Doe is here 25 years and makes 100k a year. He tells the Dept "I am entering the drop program and retiring." Well he stays at work for the next 5 years, but his pension he would be receiving since he is technically retired (75k a year) is put in an interest bearing account. While he is working he is also collecting his 2012 salary for the next 5 years. So at the end of 5 years he would have to leave. He would collect his 75% salary for life on his 2012 pay rate and would also have the 5 years of $75k per year that was deposited in his nest egg account. Also, if John Doe would die, his wife will receive his pension for life as well. Regardless I know at this immeditate time I should have more $$ in the savings.
As for the life insurance, it is term insurance. I am insured for $600k and my wife for $250k and both are doubled with certain exceptions of course. The reason I got mine so high was if something would happen to me, I would want my wife to have money to pay off the mortgage and send the kids to college.
The taxes on the house are what are really high, although I will look into refinancing. A;lso, a question would be is is financilally wise to refinance for less than a percentage point? I know the payment may go down a little, but won't the total spent on the house be a lot more? By the way, I have a 20 year mortgage and I am about 4 years into it.
Will also see if $$ can be cut on the groceries. We don't go out to eat very often either, but I know some food goes to waste. I was also contemplating ending the cell phone or reducing the items affiliated with the cell, but unfortunately I am in the middle of a 2 year contract.
I know we are not in terrible shape, but all the suggestions I receive are appreciated and give me options to look at what to do. Thanks to all.

[breathemusic]

So all of these responses are coming at this in the "what can you do for your kid's college perspective" but I'd like to come at it from a different angle of "what can your kid do for his own college" perspective. I just graduated a few years ago, and while I think it's great that you want to try and pay for all your kid's college, I didn't have that luxury, so I knew long before going in that I was gonna have to have a plan.

The suggestion about having your son apply for tons of scholarships is dead on. I must have applied for dozens of scholarships. I wrote more essays for those than I ever did for applications. And it was worth it. My freshman year i had about $10k in scholarships, and out of those, about $5-6k were 4 year scholarships that I got every year for all for years of college. Made a huge dent in the cost.

As for student loans, do you plan to take on all the loans yourself, or are you having your kids contribute to any of the cost? If your kids get a credit card as soon as they're old enough (I think I did when I was actually 17 as it was on my mother's account, but was one that would still allow me to build credit) then they could actually have a minimal credit history before having to get school loans. I know i didn't even have a co-signer on my school loans and i still was able to get good interest rates. I have no idea if having gotten a credit card sooner made a huge difference, but it was worth the effort and also taught me financial responsibility.

I personally disagree with picking no debt and settling for a cheaper school. Sure, if that school has a great program for whatever your kid wants to do, fine. But in an economy where jobs are hard to find, while it's crazy to come out with a really high amount of debt, it also might help him get a better job if he picked a good school that is well known and respected over a cheap one (not that there aren't more affordable schools that are good, just saying!). So you gotta find the right balance there between affordability and quality education (and sad to say, it's not even so much quality as it is employers knowing and respecting the school vs just thinking "you went where?").

Anyway, my point is, I think it's great that you're doing what you can to help your kids through college, but why not see what they can do to make it more affordable as well. Why is it all on you? Especially when that means footing the bill for 3 kids if you don't want to risk playing favorites.

[DebtFree&Broke]

Your kids don't need student loans to get through school on their own. My husband had scholarships for his first two years of school, I worked almost full time and he worked on Friday night and Saturday. Save money and have your kids save money too. His parents didn't give him any money for school, they expected him to get scholarships and work hard. He graduated with no loans even though he went to one of the most expensive schools in Utah for his last two years of school.

[snafu]

A different viewpoint.. Unless your children have unique career goals or you plan to send them to one of the top 10 ranked universities, remember... HR staff accept applicants without screening or ranking degree granting institutions [according to current research]. The 1st two years of most programs are General Studies so it can be cost efficient to take two years at the local community college after confirming the program will be totally transferable for credit to the university chosen.

Encourage your children to participate in high school extra curricular programs like sports and an event. Having a summer job and understanding responsibility adds to their success in winning scholarships. By the end of the 1st semester of high school, have them begin their search for scholarships as there are thousands needing review. Experience tells me that kids who have 'some skin the the game,' are more likely to be successful in university than those who rely heavily on the bank of mom & dad.