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My wife and I are blessed with a baby girl very late in life. I am 47 years old. Meaning, I would have already retired by the time she starts high school. We always wanted a child. However, now that we have our bundle of joy, the future scares me. How will I ensure that she gets the best out life, even when we are not there to watch over her?
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I have 3 kids and took sort of an unusual approach simply because I was nervous about putting money into a 529 savings plan that could be lost in the stock market, I wanted something that was guaranteed to be there when the time came even though most financial advisor's wouldn't agree.
My plan only works if you have/will have the funds to do it, both my wife and I worked although I made much more than her so that helped.
As each one of my kids was born, I started to put aside $150. per paycheck per kid from my paycheck. From my wife's paycheck I put away $75. per child per check. This money simply was put into a bank CD that earned a low APR but at least was guaranteed to be there. (higher APR years ago!)
Doing this for the last 25 years or so I managed to save well over $125,000 per child. My youngest is graduating in May and I've already stopped having to save this money which in turn gives me a nice extra sum each month back in my pocket. We have literally put all 3 of our kids through college without having to worry about a dime.
Although $150. a paycheck was a lot for me 25 years ago, just like a mortgage, it gets easier as time and pay increases that come along. Most of my friends and co-workers that are in the same income level as me are now scrambling to find ways to pay college education costs simply because they didn't put anything away.
Long story short, a small amount of money put aside each month will help a great deal down the road. -
riteshpatil, congratulations to you and DW as new parents and welcome to SA. Don't worry, enjoy each and every hour you can spend with DD.
With interest rates so very low just now, I suggest using $ 1,000. of saving to start an automatic investment account with a low cost, low fee Mutual Fund company like Vanguard, called DCA [Dollar Cost Averaging], to buy their Index Fund for the sum that is comfortable for your budget once a month or each payday as preferred. Understand that you are in control. You can change the sum if necessary and you will be buying units at different costs as the stock market does it's natural up and down gyrations. It doesn't matter a whole lot over all the years until your infant daughter grows to a high school student.
Meanwhile, as a new papa, it's critical to have an appropriate amount of term life insurance, an up-to-date Advanced Care Directive, Will and Living Revokable Trust . If these terms are unfamiliar there is a lot of detailed information available on internet/You Tube. Please don't procrastinate, it's not difficult, it's taking care of the business of looking after your family.
"May your walls know joy, may every room hold laughter, and every window open to great possibility." [Mary Anne Radmacher]Comment
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This is awesome.Originally posted by Drake3287 View Post
a little bit put away for each kiddy is great for them.
You're an awesome father, I hope the kids appreciate!Comment
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The only down fall is having to pay 100% of the full college costs simply because we had the money. Very few people are forced to pay the full costs simply because of financial situations or the lack of saving money for college.
It still bothers me that I did the right thing but was still treated differently simply because I had the means. College costs are geared towards those not having money, not to the average working class family.Comment
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