Parents of little kids: What are your college savings goals?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:My DH wants to cover 100%, I think 33% from us, 33% from the kid, 34% from scholarships is reasonable. Honestly loans aren't the worst thing that can happen to a kid and I think knowing going in that they have to pay for part of it will make them think longer and harder about public vs private, what major they want to pick and what their first job out of college will pay, the works.

I've told him that even if we hit the Powerball I'd stick to this plan, and then just pay off their loans as a graduation present. I really think having a kid be personally invested in their college education on the financial side makes them take it more seriously.

Maybe so in old days when cost was under control. With COA of 25k (instate public) to 70k (private) per year, there's no way kids can contribute in a meaningful way. Don't rely on that approach. It's a really outdated thinking.

If you truly believe there's no way for kids to contribute in a meaningful way to their own education, I'm sure your kids will live down to your expectations. The people on this board really have an insular mindset about college -- not only is it necessary for everyone but also everyone has the ability to pay full freight and therefore doing anything less is tantamount to child abuse. The kids of these parents are the ones I watched stretch "Communications" degrees into 6 year programs, knowing that mom and dad would never cut off the money flow because their precious angel absolutely had to have the best possible start in life.

How old are your kids? Have you actually done what you are preaching? If you have done it, and ONLY if you have done it, explain to us how you did it so we can learn from it.

What's to explain? Do you need a tutorial on applying for loans or something? Save the amount you want to cover, and let your kids make up the rest. Having your kid pay for part of their education is not child abuse, nor is it "outdated thinking." That's what I did in college -- my parents could cover zero, so I earned a full ride. For grad school my parents could cover zero, so I got some scholarships and took out loans for the rest. Somehow CPS never got involved.

You don't want to learn from it, you want to discredit it. Pay your kids' way, I'm not stopping you. I'm answering OP to show that there's a different way than just refueling the helicopter until the kid hits 30.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:My DH wants to cover 100%, I think 33% from us, 33% from the kid, 34% from scholarships is reasonable. Honestly loans aren't the worst thing that can happen to a kid and I think knowing going in that they have to pay for part of it will make them think longer and harder about public vs private, what major they want to pick and what their first job out of college will pay, the works.

I've told him that even if we hit the Powerball I'd stick to this plan, and then just pay off their loans as a graduation present. I really think having a kid be personally invested in their college education on the financial side makes them take it more seriously.

Maybe so in old days when cost was under control. With COA of 25k (instate public) to 70k (private) per year, there's no way kids can contribute in a meaningful way. Don't rely on that approach. It's a really outdated thinking.

If you truly believe there's no way for kids to contribute in a meaningful way to their own education, I'm sure your kids will live down to your expectations. The people on this board really have an insular mindset about college -- not only is it necessary for everyone but also everyone has the ability to pay full freight and therefore doing anything less is tantamount to child abuse. The kids of these parents are the ones I watched stretch "Communications" degrees into 6 year programs, knowing that mom and dad would never cut off the money flow because their precious angel absolutely had to have the best possible start in life.

How old are your kids? Have you actually done what you are preaching? If you have done it, and ONLY if you have done it, explain to us how you did it so we can learn from it.

What's to explain? Do you need a tutorial on applying for loans or something? Save the amount you want to cover, and let your kids make up the rest. Having your kid pay for part of their education is not child abuse, nor is it "outdated thinking." That's what I did in college -- my parents could cover zero, so I earned a full ride. For grad school my parents could cover zero, so I got some scholarships and took out loans for the rest. Somehow CPS never got involved.

You don't want to learn from it, you want to discredit it. Pay your kids' way, I'm not stopping you. I'm answering OP to show that there's a different way than just refueling the helicopter until the kid hits 30.

I put three kids thru college. While I understand your points, your post shows you are completely clueless. Good luck when the time comes.

[Anonymous]

I really appreciate what my parents did. They showed me the bank statements and said that I had $XXk to spend on college. It would almost cover 4 years of instate at the time. I desperately wanted to go to school on the opposite coast, and they never discouraged it. When acceptances rolled in with associated financial aid (or lack thereof), they helped me look at the costs and figure out what loans would be to make up the difference.

I ended up going out of state and graduating in 2.5 years to stay under budget. My sister chose to go to a smaller school that offered generous merit aid, and use the money for grade school.

Neither of us took it any less seriously because we weren't paying for it. If anything, it made us feel more responsible as we were making BIG DECISIONS on our own, rather than mom and dad narrowing our options for us.

[Anonymous]

PP - Oh, and the goal is to have enough to pay for DS to go 4 years in state, or apply however much it is out of state/private. If we have more by the time he's 18, bonus! Not sure that will happen though. We have a HHI of 170.

[Anonymous]

Another more middle class perspective. We currently save $125 per child per month. (4 and 7 year old). Each year we get a raise we have increased that amount a bit. After my next raise, we will be able to bump that up to $150 per child per month. We also throw in any monetary gifts from family/friends.

We would love to pay 100% for both children, but know that probably isnt going to happen. We will pay for as much as possible out of the 529, cash flow, scholarships, etc.. We may even be able to help on the back end- matching loan payments, etc..

I don't want my children drowning in debt and will do everything I can to ensure them a bright future... but the reality is that they will likely have loans. Preparing them for that reality in advance is part of my job. Teaching them about finance, money management, debt repayment, choices we make that impact our future, balancing college with a part time job, etc..

[Anonymous]

HHI is about $350k between earned and investment.

We have three kids. Our plan is to have about $60k saved for each when they reach college age. We'll be able to pay for in-state or cost-equivalent by drawing from that $60k and either diverting some normal investment earnings or cash flowing the difference.

At this point, we don't think that private is worth it for undergrad.

Our personal goal is to have the option to retire by 50 with about $6M invested.

We'd rather help our kids out in a serious way later on by maybe paying for half their houses. I think that's a better use of $$ then $300k for a private undergrad.

[Anonymous]

HHI is 500K. We put $500 in a month. We max our retirement and also put money into a brokerage account. We live in a state with no income tax so we don't get any state tax benefit from the 529. Whatever isn't in there by the time they go to college we will just pay for. I want them to go wherever they want - either state or private - and that we will cover it (something my parents were not able to do for me).

Now - will I pay for them to go to some crappy private college for 70K a year over our very good state school here? No. But if they get into an Ivy/same level, you better believe I will spring for it.

[Anonymous]

I'm just trying to have enough money for DD each week. There's no savings for college.

[Anonymous]

We save $300 per kid and start when they start ES. By my calculation, that should produce approximately 60K per kid when time comes. I also have a rental property that should be paid off by the time my oldest enters college, and I plan to sell it then. Conservatively, it should bring around $300K, which is 100K per kid. So, they'll have 160K each, give or take. The rest is up to them.

Generally, I prioritize retirement and emergency savings before college. They can borrow for college but ain't nobody lending to put me in a nursing home.

[Anonymous]

Anonymous wrote:HHI is 500K. We put $500 in a month. We max our retirement and also put money into a brokerage account. We live in a state with no income tax so we don't get any state tax benefit from the 529. Whatever isn't in there by the time they go to college we will just pay for. I want them to go wherever they want - either state or private - and that we will cover it (something my parents were not able to do for me).

Now - will I pay for them to go to some crappy private college for 70K a year over our very good state school here? No. But if they get into an Ivy/same level, you better believe I will spring for it.

Once again, the main benefit of the 529 isn't the state income tax deduction. That's small potatoes. The main benefit is that all of the earnings in the 529 are completely tax-free. 18 years of compounding can yield a lot of earnings -- normally would be taxed at the capital gains rate. I mean very conservatively, if you put in $5k a year you could be looking at $90k in earnings very easily. If you do that in a regular brokerage account, depending on your tax rate, you could be paying $13-18k in capital gains tax on that when it comes time to withdraw and pay for college. That's a lot of money! Even moreso for people who intend to pay full freight for private school.

[Anonymous]

Our goal is for our son to complete college without debt.

[Anonymous]

OP at your income level you should be able to save a decent amount for college even if you prioritize retirement savings
Our HHI is much less than yours and our goal is to have around $180k in today’s dollars by the time he gets to college (only child). We are prepared to self fund the shortfall but will still be a little short and hope he gets a little financial aid. Our dilemma is whether to blow the wad on undergrad or encourage him to go instate (UMD) for undergraduate so we can help with grad school

[Anonymous]

Anonymous wrote:Our goal is for our son to complete college without debt.

This was our goal for our two sons too and I am proud to say it looks like we have done it. Both are in college now and each cost around $42k a year all in. We have plenty, even if they take an extra year- which it looks unlikely at this point.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:My DH wants to cover 100%, I think 33% from us, 33% from the kid, 34% from scholarships is reasonable. Honestly loans aren't the worst thing that can happen to a kid and I think knowing going in that they have to pay for part of it will make them think longer and harder about public vs private, what major they want to pick and what their first job out of college will pay, the works.

I've told him that even if we hit the Powerball I'd stick to this plan, and then just pay off their loans as a graduation present. I really think having a kid be personally invested in their college education on the financial side makes them take it more seriously.

Maybe so in old days when cost was under control. With COA of 25k (instate public) to 70k (private) per year, there's no way kids can contribute in a meaningful way. Don't rely on that approach. It's a really outdated thinking.

If you truly believe there's no way for kids to contribute in a meaningful way to their own education, I'm sure your kids will live down to your expectations. The people on this board really have an insular mindset about college -- not only is it necessary for everyone but also everyone has the ability to pay full freight and therefore doing anything less is tantamount to child abuse. The kids of these parents are the ones I watched stretch "Communications" degrees into 6 year programs, knowing that mom and dad would never cut off the money flow because their precious angel absolutely had to have the best possible start in life.

How old are your kids? Have you actually done what you are preaching? If you have done it, and ONLY if you have done it, explain to us how you did it so we can learn from it.

What's to explain? Do you need a tutorial on applying for loans or something? Save the amount you want to cover, and let your kids make up the rest. Having your kid pay for part of their education is not child abuse, nor is it "outdated thinking." That's what I did in college -- my parents could cover zero, so I earned a full ride. For grad school my parents could cover zero, so I got some scholarships and took out loans for the rest. Somehow CPS never got involved.

You don't want to learn from it, you want to discredit it. Pay your kids' way, I'm not stopping you. I'm answering OP to show that there's a different way than just refueling the helicopter until the kid hits 30.

There is surely a middle ground OP. If you can't afford to pay 100% then I would understand it if you said here is what we can do and if you want to go to a more expensive place you need to apply for scholarships. I don't really understand why you would want your child to take on debt to finish their undergraduate degree. Perhaps I am being overprotective but I really don't think an 18 year old can make a truly mature decision about taking on debt.
If you want your child to take some responsibility for their education which seems like a fine idea why not insist they get a part time job (say 10 hours a week) while in school and that they work for most of their summer vacation unless they have a worthwhile internship position lined up.
You know your children better than people on an anonymous forum. If you are worried they are too immature to take their studies seriously and might take too long to graduate, why not insist they start out at community college. I really don't see how the "cure" for immaturity and irresponsibility is to require your child to take out a student loan.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:My DH wants to cover 100%, I think 33% from us, 33% from the kid, 34% from scholarships is reasonable. Honestly loans aren't the worst thing that can happen to a kid and I think knowing going in that they have to pay for part of it will make them think longer and harder about public vs private, what major they want to pick and what their first job out of college will pay, the works.

I've told him that even if we hit the Powerball I'd stick to this plan, and then just pay off their loans as a graduation present. I really think having a kid be personally invested in their college education on the financial side makes them take it more seriously.

Maybe so in old days when cost was under control. With COA of 25k (instate public) to 70k (private) per year, there's no way kids can contribute in a meaningful way. Don't rely on that approach. It's a really outdated thinking.

If you truly believe there's no way for kids to contribute in a meaningful way to their own education, I'm sure your kids will live down to your expectations. The people on this board really have an insular mindset about college -- not only is it necessary for everyone but also everyone has the ability to pay full freight and therefore doing anything less is tantamount to child abuse. The kids of these parents are the ones I watched stretch "Communications" degrees into 6 year programs, knowing that mom and dad would never cut off the money flow because their precious angel absolutely had to have the best possible start in life.

How old are your kids? Have you actually done what you are preaching? If you have done it, and ONLY if you have done it, explain to us how you did it so we can learn from it.

What's to explain? Do you need a tutorial on applying for loans or something? Save the amount you want to cover, and let your kids make up the rest. Having your kid pay for part of their education is not child abuse, nor is it "outdated thinking." That's what I did in college -- my parents could cover zero, so I earned a full ride. For grad school my parents could cover zero, so I got some scholarships and took out loans for the rest. Somehow CPS never got involved.

You don't want to learn from it, you want to discredit it. Pay your kids' way, I'm not stopping you. I'm answering OP to show that there's a different way than just refueling the helicopter until the kid hits 30.

There is surely a middle ground OP. If you can't afford to pay 100% then I would understand it if you said here is what we can do and if you want to go to a more expensive place you need to apply for scholarships. I don't really understand why you would want your child to take on debt to finish their undergraduate degree. Perhaps I am being overprotective but I really don't think an 18 year old can make a truly mature decision about taking on debt.
If you want your child to take some responsibility for their education which seems like a fine idea why not insist they get a part time job (say 10 hours a week) while in school and that they work for most of their summer vacation unless they have a worthwhile internship position lined up.
You know your children better than people on an anonymous forum. If you are worried they are too immature to take their studies seriously and might take too long to graduate, why not insist they start out at community college. I really don't see how the "cure" for immaturity and irresponsibility is to require your child to take out a student loan.

Well, this is an artful mischaracterization. I don't think my kids are immature, nor did I ever imply as much. I think teaching a kid that the important things in life is free is a bad lesson, and false, and doesn't instill the values that are important to me. I don't think the kids I watched mess around in college and switch majors and skip class and drag their feet were irresponsible simply because it was paid for, I think it was because they came from the kind of family where it was understood it would be paid for. It was never going to be their problem if they failed out, or got kicked out, or even simply failed to distinguish themselves.

Like I said, if I hit the Powerball I'd probably pay off their loans as a graduation present. Furthermore, if they can get scholarships to cover more than a third, that comes out of their share. Making them carry debt after school isn't the issue. Making them take ownership of their college choices, from choosing a school to choosing a major to determining how much effort they put in once they're there, is the issue. "Kids" in college are actually adults, and I plan to treat them accordingly.