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

[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?

So did most of us. The problem for you is that the market has changed dramatically. The cost of education has far outpaced inflation. Even in-state institutions are around $35K a year and privates are heading towards $80K a year. Merit money has dried up at the top ranking schools (because they don't need to offer it to get the class they want). You can't count on merit money. You can't count on summer jobs even making a dent towards what you may want to pay. Do you have a fiinancial counselor you can talk to?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:PP here- sorry I meant the cost of 4yrs at the university I attended doubled.

Same here. And now they they have the nerve to call me asking for money. That's some Boomer nonsense. I have a lot better places to put my money than my now over-priced alma mater.

Just like Fannie and Freddie destroyed the housing market in slow motion, the similarly liberal-controlled education-financial complex is destroying higher education by blowing up its financial sustainability. Schools are now filled with bloated admin staffs, unneeded new buildings, useless majors, Title IX program offices, etc. The costs spiral out of control, passed along as student debt that then stifles generation(s) of student adult prosperity.

This is not what's driving up costs. States have stripped funding that used to go to higher ed out of their budgets. In state schools used to be heavily subsidized by the government, and the Tea Party revolution changed that. Costs skyrocketed because the bill was shifted to the student, not because of Title IX offices (which have been around since the 70s).

That is huge reason why. It goes for public and privates. Do the kids need the luxury dorms, fancy gyms, etc. And, why do they even need so many buildings when many classes are online now?

[Anonymous]

Anonymous wrote:We did 4 years of VA prepaid tuition for each kid about 10 years ago (yes - I am risk averse) and have an additional $100k in an inVest account for each kid (2 of them). Hoping it will be enough. About 5 years to go.

We did that too. Seems to make the most sense.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Here's something for everyone to think about. Cost of attendance is rising at about 4 to 5% per year. If you plug in how much a college costs now, and calculate how much it will cost by the time your kid gets to college, you will be horrified.

For example - a school that costs $33,000 a year to attend today costs $132,000 for four years. If it increases 5% per year it will cost $191,000 for four years starting in 2025 and $232,000 for four years starting in 2029. Ouch!

Better hope your 529 investments are doing better than 5% a year or you are only just staying even with the rising costs.

Yes. It's crazy. I graduated from college in 2001 and the cost of a 4-year education (tuition, room and board, etc.) has DOUBLED since then. Meanwhile the U.S. Real Median Household Income has gone from something like 60k to 63k.

Families are getting squeezed all around- people are living longer and many companies have done away with pensions, so you need to save more for retirement. Healthcare costs keep going up. And once someone is speniding their 20s/30s paying back student loans, it perpetuates a cycle of not being able to save enough for their kids.

I don't know what the answer is, but the current trajectory is not sustainable. Something will have to give.

We do what our parents did. Live under our means and save. Colleges were still a lot of money back then. My parents still paid $25-30K or more a year. Our kids know they will go to the state college as that is what we can comfortable provide.

[Anonymous]

We try to do $10K a year per child. We don't always do it, but we try.