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    College Savings

    Those that have college savings accounts for their children - How did you decide how much to fund it? My wife and have a target of having one semester of in-state tuition every two years so that by the time they are 16 they will have 4 years of tuition saved if they choose to go to an in-state school.

    #2
    We have 3 kids and when we started ours 13 years ago we just did what we could afford and then divided it by 3. Our goal was to save for one year for each kid.

    The plan was they were to do a year in high school; college credit plus classes, we'd pay a year, they'd pay a year, and (they'd) get loans for a year. So far we have 2 in college and its been working according to plan.

    One kid lives at home and commutes, the other lives at another school an hour away. They both got scholarships that covered their part and they work summers and breaks for spending money and books.

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      #3
      We saved what we could and eventually settled on $2K a year per child (we have two daughters), since we started with the Educational Savings Accounts and that was the limit.

      Our oldest daughter is a sophomore in college. She had close to $25K saved by the time she started. We have used all but $12K of the money. Honestly, much of it has gone to pay room and board! She had some great scholarships the first year that covered nearly all of the tuition. This year, we are trying to cash flow the tuition portion and still rely on money saved for housing. Next year she will have access to Post 911 GI bill funds that my husband transferred to her, that will cover all tuition and nearly all of housing. And we expect as a double major she will need a few summer classes and possible a 9th semester. The last of the money will cover those. We are hoping the lowest amount of loans as possible.

      I suggest to any parent to make sure that you are first saving well for retirement, you have an emergency fund, and all credit card debt paid BEFORE saving for college. You can borrow for college, but not for retirement. We have been happy to not have any debt (no mortgage, renting while moving with military) while we are cash flowing some of the costs of college.
      My other blog is Your Organized Friend.

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        #4
        Plenty of other threads on this subject, if you run a search...

        Our number (which has been reached) was the cost of 3 years at a very good state school. We have the resources to fund all 4, but want him to be responsible for the rest.
        seek knowledge, not answers
        personal finance

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          #5
          Originally posted by Thrif-t View Post
          we just did what we could afford
          Originally posted by creditcardfree View Post
          We saved what we could
          I think this is really the answer.

          We figured out what we could spare for that purpose and put it on autopilot. A couple of times over the years, we adjusted the number as resources changed.

          I don't recall specifically but I'm sure I did some projections from time to time to see where we'd end up.

          As it turned out, we were able to fully cover years 1 and 2 with a little left over for year 3 (which she is in now). We still have $300/month going into that account. I just need to decide when to stop that and close the account.
          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.

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            #6
            We never saved specifically for kids college, just figured out a way to cash flow it when that time came. Only one of the two attended, so it wan't too painful.

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              #7
              We like CCF are funding $2k/year into an ESA for our kids. Right now at 6 and 4 they have $10k and $16k i think. So we are track to fund some portion, I'm not sure. Starting 2018 I think the goal is to double it to $4k/each.

              We really want to finalize our own financial goals before we fund the kids. I think we can do everything we want, but we need a budget and to make sure. Right now too many factors are maybes in the budget. No house, no idea about bonuses, and unsure really about income.
              LivingAlmostLarge Blog

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                #8
                My dad asked we open Mutual Fund accounts for each son soon after they were born and we began with minimum, monthly payments. My dad likewise contributed small sums regularly and encouraged all the relatives to donate whatever they might have gifted to those Mutual Funds for every and all gifting occasions. DKs also got gifts for birthdays, Christmas and accomplishments but more modest compared with friends. They understood the story of savings 10% and always contributed 'earnings' from chores and small projects.

                Long story short over 18 years, with an incredible number of small contributions and the magic of long term compounding, MFs covered local college, university degree and one year of graduate studies. One son had a small student loan, due to choices he made and he paid it off quickly.

                Since DH and I funded our own tuition, we felt our sons needed to have 'skin in the game. ' They contributed earnings from summer jobs and misc monies without complaint. Both are well launched in careers they enjoy.

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                  #9
                  Is a 529 the most superior thing in terms of saving for college? Is that money taxed when you use it for college?

                  For whatever reason my parents didnt want to use a 529 so they're using some sort of taxable fund...index fund possibly? I imagine this isnt the best way to go since you have to pay taxes when you take it out? Also...are 529s before tax or after tax when you put money in?

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                    #10
                    Originally posted by rennigade View Post
                    Is a 529 the most superior thing in terms of saving for college? Is that money taxed when you use it for college?

                    For whatever reason my parents didnt want to use a 529 so they're using some sort of taxable fund...index fund possibly? I imagine this isnt the best way to go since you have to pay taxes when you take it out? Also...are 529s before tax or after tax when you put money in?
                    For PA we don't pay state income tax for money into the 529 but you do pay federal tax. For withdrawals for qualified education expenses they are State/Federal free.

                    Comment


                      #11
                      Originally posted by Fishindude77 View Post
                      We never saved specifically for kids college, just figured out a way to cash flow it when that time came. Only one of the two attended, so it wan't too painful.
                      That's our plan for the moment. Our daughter is only 2 and I'm not sure whether or not we'll have more kids. I don't like trying to guess what sort of post-secondary education our kid(s) might need and what it might cost. I'd rather get the house paid off and get ahead on our retirement savings now to give our future selves the flexibility to handle whatever educational or other cost arise in the future.

                      Our daughter does have a 529 with almost $4000 where we've been stashing away most of the monetary gifts she's received. But, most of that money came in when she was born, and I'm not expecting it to continue.

                      Comment


                        #12
                        Originally posted by rennigade View Post
                        Is a 529 the most superior thing in terms of saving for college? Is that money taxed when you use it for college?
                        529 funds are tax-free when used for qualified education expenses. So the money grows tax-free and there are no taxes when you take it out. In some states, there is a state tax deduction for the contributions.

                        We definitely used a 529.
                        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


                          #13
                          Originally posted by snafu View Post
                          My dad asked we open Mutual Fund accounts for each son soon after they were born and we began with minimum, monthly payments. My dad likewise contributed small sums regularly and encouraged all the relatives to donate whatever they might have gifted to those Mutual Funds for every and all gifting occasions. DKs also got gifts for birthdays, Christmas and accomplishments but more modest compared with friends. They understood the story of savings 10% and always contributed 'earnings' from chores and small projects.

                          Long story short over 18 years, with an incredible number of small contributions and the magic of long term compounding, MFs covered local college, university degree and one year of graduate studies. One son had a small student loan, due to choices he made and he paid it off quickly.

                          Since DH and I funded our own tuition, we felt our sons needed to have 'skin in the game. ' They contributed earnings from summer jobs and misc monies without complaint. Both are well launched in careers they enjoy.
                          Snafu, how much were you saving for 18 years? And what they did up with at the end of 18 year? How much was saving and how much compounding?
                          LivingAlmostLarge Blog

                          Comment


                            #14
                            Originally posted by disneysteve View Post
                            529 funds are tax-free when used for qualified education expenses. So the money grows tax-free and there are no taxes when you take it out. In some states, there is a state tax deduction for the contributions.

                            We definitely used a 529.
                            Oh wow...I can see why they're so popular. Good to know...thanks.

                            Comment


                              #15
                              Originally posted by rennigade View Post
                              Oh wow...I can see why they're so popular. Good to know...thanks.
                              They are very similar to Roth's. In fact, within our 529, there are target funds just like for retirement. So it's basically like a retirement account but for college.
                              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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