Tips for saving for college? How much to do you put into your kids college savings acct?

[Anonymous]

Anonymous wrote:While it's not very DCUM-ish, we don't save for college. Our parents did not pay for our schooling, and we fully expect our kids will take on their own loans to pay for theirs. Grandparents do contribute to a 529 that will offset some of the difference in the very high cost of college today vs. what it cost 25 years ago, but it is more important to me that we save adequately for retirement so that our kids won't be saddled with caring for us then. If we had a windfall or new jobs that allowed us to max out retirement and also save for college--absolutely we'd start contributing to the 529s. But right now we don't have the resources to do both, and have decided (in part based on advise from a financial advisor) that retirement saving is more critical.

Around DC area, it is common for parents to pay for college or at least help. If you prefer to spend it on a big house, fancy cars and retirement, that's your choice but don't expect them to all go to college. Its one thing if you cannot afford it, but its another if you make lifestyle choices and choose not to. Today, you need a college degree to do most things. Its not optional like it was for our grandparents or even some of our parents. We choose to live in a small house and live way under our means so we can heavily save for college. My husband's parents didn't pay for his and he struggled till he got it in his 30's. He missed out having a normal college experience. Mine paid for mine. I cannot imagine not paying for ours, even if it just means a state college and graduate school. I'm not going to hope for financial aide and I don't want mine starting out life on their own in crazy debt.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Fewer kids.

Either that, or move to Europe, or vote trump in 2020 so the bull market continues.

This has nothing to do with Trump. College prices have been on the rise for many many years. They were high when many of us went and now they have doubled.

[Anonymous]

We didn't save. I returned to work two years before DC graduated from HS after being a SAHM. My salary pays the tuition. DC has always had a summer job and this year will have a job on campus to defray expenses.

[Anonymous]

I put $100 a month in each kid’s (2). I also put in any extra money (tax refunds, work bonus, monetary gifts they get)-this year it will be about $3500 each. I expect to start putting in $200 a month each (plus extras) when the younger one is done with daycare in a year.

Their dad (divorced) puts in another $100 between them a month.

[Anonymous]

Anonymous wrote:

Anonymous wrote:While it's not very DCUM-ish, we don't save for college. Our parents did not pay for our schooling, and we fully expect our kids will take on their own loans to pay for theirs. Grandparents do contribute to a 529 that will offset some of the difference in the very high cost of college today vs. what it cost 25 years ago, but it is more important to me that we save adequately for retirement so that our kids won't be saddled with caring for us then. If we had a windfall or new jobs that allowed us to max out retirement and also save for college--absolutely we'd start contributing to the 529s. But right now we don't have the resources to do both, and have decided (in part based on advise from a financial advisor) that retirement saving is more critical.

Around DC area, it is common for parents to pay for college or at least help. If you prefer to spend it on a big house, fancy cars and retirement, that's your choice but don't expect them to all go to college. Its one thing if you cannot afford it, but its another if you make lifestyle choices and choose not to. Today, you need a college degree to do most things. Its not optional like it was for our grandparents or even some of our parents. We choose to live in a small house and live way under our means so we can heavily save for college. My husband's parents didn't pay for his and he struggled till he got it in his 30's. He missed out having a normal college experience. Mine paid for mine. I cannot imagine not paying for ours, even if it just means a state college and graduate school. I'm not going to hope for financial aide and I don't want mine starting out life on their own in crazy debt.

PP, and it's not like we have fancy cars or a big house. We would certainly prioritize college saving over those things. We already have a small house and one paid off car, so there aren't a lot of corners we could cut to allow us to shift money into college savings. Our kids will qualify for substantial financial aid, and of course we expect to contribute the family portion from our earnings and assets while they're in school. We're just opting not to save for college instead of retirement. Unfortunately my grandparents did not make that choice, and it was pretty awful to watch the impact of that decision on my parents and their siblings in the final years when their resources ran out. We are actively choosing to avoid that path (and my parents made the same choice, based on that experience).

[Anonymous]

I paid cash for my 3 kids college/living costs and it was easier then most people think. Few if any of my friends were able to do this for there kids.

My secret, when our first child was born I simply put aside $100. per paycheck and my wife did $75.00. During the next 20 years we did this for all 3 of our kids including increasing the amount a little from time to time. Starting off with this $100. per paycheck was easy and I never noticed a real difference in my pay. Spread out over the years with normal pay raises it wasn’t even noticeable. We continued to pay this x3 all the way through the graduation of the youngest.

Besides having cash available to pay all the college bills without worrying, as soon we stopped paying into this college fund it was instantly a huge pay raise for the both of us. Do the math, saving just a little each paycheck will end up being a ton of money.

[Anonymous]

My husband and I were raised on opposite parental philosophies on this... If you have cable, fancy phones, new cars, more mortgage than you need, maid service, dine out often, salon visits, or club memberships of any kind and can't pay for your child's college,.... not even sure what to say, but I feel bad for your kids. At least you have your vaycay!!

[Anonymous]

I agree with everything above.

I find the one about moving to Europe particularly amusing.

I kind of suck at monthly contributions. But we shot for $100k contributions per kid and it worked out nicely in our 529s. The investments doubled and more. After several years of tuition room and board we have truly only decreased the max we had by $20-30k.

If your friends have limited resources and their gifts exhanged are normally purchased at some equivilent of Dollar General of course they should be exempted from any expectations or requests for 529 contributions. But for those of us that $25 plus gifts would be the norm, by all means suggest 529 contributions. Over a period of 18 years hundreds of $25 gifts to 529s plus compounding investments gains translates into real money.

At parties there's always going to be tons of games, cakes, ice cream and decorations. Plenty of fun will be had by all!

Nothing in the birthday parties will be lost by some guests slipping that $25 they would have spent on virtually useless toys and gift cards into a 529 account.

Gift cards are so complicated to use people seldom receive the full value of gift cards in products or services rendered.

It's truly sad the huge money equivalents in toys, junk, and gift cards we threw away when our youngsters were children.

My tale is that we are fortunate and we paid for the majority of the roughly $100k which then doubled through 18 years. However, whenever people gave us cash for gifts either to we the parents or our children it went into the kids 529s.

If you plan well, work together towards a goal and keep your family in tact, planning for and paying for college can be easy.

College education remains the best path to upward mobility in America today. Please remember that 70% of Americans do not have a four year college degree. Having a four year college degree gives a kid an employment advantage over 70% of other job candidates in their generation.

There are entrepreneurs and special people who don't need to go to college, but for the vast major of us college is the best path to upward mobility. Create 529s for your children and encourage those with the means to spend their money on your child's future, not on some junk that will go out with tomorrow's trash.

Granted we are financially secure, but be assured that having those 529s available to pay our college tuition fees every semester is a very nice feeling

[Anonymous]

We do large chunks at the end of the year and do a monthly drip of 350/mo. This year we are dumping 60k in. Our kids are 8&12, so we are currently full stream ahead, cranking as much as possible in. Plan to fund 4 years of state for each kid. Our kids would be fu%ked of we had 4 of them.

I feel like 4 kids are for rich or poor people. Not the in betweens who simply want to provide a better life and more opportunity than we had growing up. The rich have nothing to lose and all to gain and the poor just dig themselves into a deeper hole having a litter of kids.

[Anonymous]

We do large chunks at the end of the year and do a monthly drip of 350/mo. This year we are dumping 60k in. Our kids are 8&12, so we are currently full stream ahead, cranking as much as possible in. Plan to fund 4 years of state for each kid. Our kids would be fu%ked of we had 4 of them.

I feel like 4 kids are for rich or poor people. Not the in betweens who simply want to provide a better life and more opportunity than we had growing up. The rich have nothing to lose and all to gain and the poor just dig themselves into a deeper hole having a litter of kids.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Fewer kids.

+1. Fewer kids or drastic increase in income

Geez, can you at least try to be helpful? OP obviously isn't giving up his children, and probably can't snap his fingers to make another $100k materialize in his salary. First off OP give yourself a break. Only on DCUM is it considered a divine right that all children shall be bestowed with food, clothes ...and $200,000 to spend on the college of their choice. Start by putting away $250 a month for each child, and see if you can work up from there. Put it in your MD or VA 529 account, so you get the state tax savings. Every little bit helps. Maybe you won't be able to finance their education. But who knows if all four will even go into fields that need a degree? And for those that do: maybe they do community college for the first two years, you pay for the 3rd year and they take out loans for the 4th.

[Anonymous]

I put in the same amount as I put into my 401k, which is the limit of 18,000 per year.

[Anonymous]

We started at $50 per month into the 529 and now two years before college are putting $800 per month. If all goes well we will have $180k when ds starts college. That’s $45k per year and we can probably chip in another $10-15k per year
I wish we could have put more in when he was younger but we just did not make enough then.
He can definitely go in state but I wish we could afford to send him to the best college he gets into. Good luck OP.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I’m mystified, op. How have you gotten to a point where you have 4 kids and only now thinking of college.

How much do you make? How much do you want to fund? What is your overall budget?

We’ve got two kids, make $240 and save $700 per month per kid. We will probably bump up to the $14k each year. But I’m not really sure how that’s going to help you.

It's not that I didn't think @ it. We have 4 529s. I think the issue is that I redid the math and realize I could use $500k ++ in college savings and realize I might have $200k. It's a little late now to 'have less kids' Frankly, I paid for my own college and my husband paid half of his - so the backup plan is they need to get a scholarship or a loan. We do ok (not DCMUM wealthy/ upper class but ok). The younger ones are pretty young, early elem so I have time to save. Also there is an investment factor here. I don't know my 529 is making an adequate return. Should I ditch and manage the money myself?

Also note - every person I know of (not that few since my kids aren't that old) seem to be like - I'm scraping by now bc I'm putting kids through college. So it seems like a lot of ppl don't have it all saved?

OP do you currently have $200k in the 4 529s? Confusing. When does your first kid go to college and how much do you expect to have saved for kid 1 at that time? Also which state do you live in?

[Anonymous]

My answer is as much as I can. I have just one, now 12, and his account has about $95k. I put $500/month in now -- I used to do more of a lump sum at tax refund time, and just a little in monthly, but now do more monthly and give a bump at the end of the year.
Do I know this is the right amount? No, but it fits in my budget, and certainly will help pay for college, even if it doesn't cover it all. I have no idea if my child will go to a state school or private. I don't know exactly how much I will need to pay, but I sleep pretty well at night thinking I am doing what I can.