Anonymous
Post 01/29/2018 13:01     Subject: Parents of little kids: What are your college savings goals?
Anonymous wrote:DW and I disagree somewhat on the priority of saving for college. I think it's last priority after retirement savings and making sure we have a decent emergency cushion.

HHI is about $280/yr. 3 year old and 6 year old in public school. $650K mortgage. About $600K in 401ks, $60K in liquid/emergency funds. Only other debt is about $20K in student loans that are very low rate (2%) that will be done in a few more years.

The debate is: should we be aspiring to cover all of those future college costs? Where we've settled for the time being is 50% of out of state tuition for both kids - which equates to $750/month right now. Planning to increase that by about 2-3% a year going forward. We can't predict now what kind of scholarships or grants kids may be eligible for, and innumerable college calculators have given us pretty different answers, so 50% seemed an OK compromise.

What is everyone trying to get done? 100% coverage for college for their kids? Private university rates with inflation? Out of state public tuition?



Generally, our goal is to pay for all higher education expenses, regardless of what they are: tuition, room, board, books, study materials, transportation to/from school, etc. We are prepared for it to be out of state and/or private.
Anonymous
Post 01/29/2018 12:58     Subject: Parents of little kids: What are your college savings goals?
Anonymous wrote:We plan to pay for in-state only. We are contributing $600 per child per month. To the extent it costs more than that down the road we will pay the difference with other funds. We do not intend to pay for grad school.


Same here. We have an only child, so there may be an opportunity for us to give him a bit more, but I honestly won't entertain private or OOS due to the extra costs. Further, my opinion is that if he wants to go to grad school he can go to community college for the 1st two years to allocate the money that way.

We contribute $450 a month and he currently has about $60K at age 9. My goal is $120k based on several online calculators.

Agree with OP that retirement is first.
Anonymous
Post 01/29/2018 12:58     Subject: Parents of little kids: What are your college savings goals?
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.
Anonymous
Post 01/29/2018 12:37     Subject: Parents of little kids: What are your college savings goals?
Anonymous wrote:
Anonymous wrote:We are saving only as much as benefits us tax wise. In Virginia that is 4k a year per kid. We have 4 kids so saving about 1,400 a month total.


This is what we do as well. When our first was born, we lived in a state with a $10k/year max for the tax advantage, so we started contributing on that basis and have never changed it. Second and third kids are on the VA basis. We're on track for kid #1 to be fully funded for private tuition, and behind that pace for the later born kids. DH and I have never specifically talked goals, but I think we're both on the same page with letting our kids decide where they want to go and be able to fund it 100%, so we will have some catch-up to do at some point (unless they all decide to go to UVA, which we would be thrilled with b/c DH loves Charlottesville and wants to visit all the time).

HHI is currently over $500k, so we are also saving considerably for retirement and I agree with the sentiment that that should come first. We are fortunate enough to be able to do both as of now.


Just so you know, the tax free growth is a much bigger tax benefit than the state income tax deduction. 18 years of compounded returns completely tax free!
Anonymous
Post 01/29/2018 12:32     Subject: Parents of little kids: What are your college savings goals?
Anonymous wrote:We are saving only as much as benefits us tax wise. In Virginia that is 4k a year per kid. We have 4 kids so saving about 1,400 a month total.


This is what we do as well. When our first was born, we lived in a state with a $10k/year max for the tax advantage, so we started contributing on that basis and have never changed it. Second and third kids are on the VA basis. We're on track for kid #1 to be fully funded for private tuition, and behind that pace for the later born kids. DH and I have never specifically talked goals, but I think we're both on the same page with letting our kids decide where they want to go and be able to fund it 100%, so we will have some catch-up to do at some point (unless they all decide to go to UVA, which we would be thrilled with b/c DH loves Charlottesville and wants to visit all the time).

HHI is currently over $500k, so we are also saving considerably for retirement and I agree with the sentiment that that should come first. We are fortunate enough to be able to do both as of now.
Anonymous
Post 01/29/2018 12:19     Subject: Parents of little kids: What are your college savings goals?
We have eerily similar stats, down to the student loan rate.

We save $4,000/kid/year in a 529. We started when the first was born because that was the max we could save for the DC state tax benefit.

We figure we will pay half from the 529 and half from current income. We will never have 2 in college at the same time (5 years between kids). I expect both kids will go to private colleges since we live in DC.
Anonymous
Post 01/29/2018 12:12     Subject: Re:Parents of little kids: What are your college savings goals?
We put around $5k a month into private brokerage but only $500-1k per kid into the 529. We paid for law school for one spouse out of cash flow so I’m sure we can handle it for undergrad.
Anonymous
Post 01/29/2018 12:04     Subject: Parents of little kids: What are your college savings goals?
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.



I don't know. I think if kids are contributing (through loans) about $5-10k per year, it's meaningful for them without crushing their future with burdensome loan costs. Our plan is to fully cover in-state public. But if kids wanna go to private, I think they're gonna have to finance something like $7.5k per year. They should understand that it costs a lot more to go private.
Anonymous
Post 01/29/2018 11:47     Subject: Re:Parents of little kids: What are your college savings goals?
Anonymous wrote:I like to give a more middle class perspective because I think it's important to see everyone's budget. I am a nurse, make 72k, and have 2 kids. Currently have no financial support from ex dh. I contribute 1200 a year per kid. So 100 a month per kiddo. It seems like peanuts comparatively but it's a sacrifice and something I am still proud of. Even if it's only a semester my kids will know that I saved their whole life for college.


This is excellent. They will likely also benefit from financial aid whereas the other poster's children will not.
Anonymous
Post 01/29/2018 11:44     Subject: Re:Parents of little kids: What are your college savings goals?
Anonymous wrote:I like to give a more middle class perspective because I think it's important to see everyone's budget. I am a nurse, make 72k, and have 2 kids. Currently have no financial support from ex dh. I contribute 1200 a year per kid. So 100 a month per kiddo. It seems like peanuts comparatively but it's a sacrifice and something I am still proud of. Even if it's only a semester my kids will know that I saved their whole life for college.


This is great, and I guarantee you your kids will be grateful.
Anonymous
Post 01/29/2018 11:40     Subject: Parents of little kids: What are your college savings goals?
We are saving only as much as benefits us tax wise. In Virginia that is 4k a year per kid. We have 4 kids so saving about 1,400 a month total.
Anonymous
Post 01/29/2018 11:38     Subject: Re:Parents of little kids: What are your college savings goals?
I like to give a more middle class perspective because I think it's important to see everyone's budget. I am a nurse, make 72k, and have 2 kids. Currently have no financial support from ex dh. I contribute 1200 a year per kid. So 100 a month per kiddo. It seems like peanuts comparatively but it's a sacrifice and something I am still proud of. Even if it's only a semester my kids will know that I saved their whole life for college.
Anonymous
Post 01/29/2018 11:35     Subject: Parents of little kids: What are your college savings goals?
My HHI is around the same. I save $200/month per child. It's my last priority. I have two kids and one can be covered by the GI bill, though.
Anonymous
Post 01/29/2018 11:33     Subject: Parents of little kids: What are your college savings goals?
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.
Anonymous
Post 01/29/2018 11:25     Subject: Parents of little kids: What are your college savings goals?
Anonymous wrote:DW and I disagree somewhat on the priority of saving for college. I think it's last priority after retirement savings and making sure we have a decent emergency cushion.

HHI is about $280/yr. 3 year old and 6 year old in public school. $650K mortgage. About $600K in 401ks, $60K in liquid/emergency funds. Only other debt is about $20K in student loans that are very low rate (2%) that will be done in a few more years.

The debate is: should we be aspiring to cover all of those future college costs? Where we've settled for the time being is 50% of out of state tuition for both kids - which equates to $750/month right now. Planning to increase that by about 2-3% a year going forward. We can't predict now what kind of scholarships or grants kids may be eligible for, and innumerable college calculators have given us pretty different answers, so 50% seemed an OK compromise.

What is everyone trying to get done? 100% coverage for college for their kids? Private university rates with inflation? Out of state public tuition?


Your income level and current savings is more than enough for you to be able to save at least for out of state college costs. I would aim for 100% of instate tuition and R&B in 529s and save elsewhere in non-binding funds in case they go out of state.