College Saving Plans

[CRIMPS]

My parents have already donated money for a college fund for the baby that wont arrive for another four months, God willing. I am starting to do some research on 529 funds, etc., for the baby on the way. School me on College Saving Plans. Anything special you are doing other than just socking money away in a savings account?

Thanks. :)

[Ogre]

I dont know about TX, but here in Florida you can lock in todays college rates by opening a prepaid college fund account.

[CigarNut]

The biggest thing is putting the money away regardless of the plan. I know several people that had good intentions and put some money away, but then they stopped and ended up with far less funds than they needed...

[themoneycollector]

I will provide a slightly different perspective.

Don't save in a 529 or any college fund for your children unless you have your own retirement funds covered first and foremost.

College loans are easy to apply for and receive. There's no such thing as a retirement loan (well maybe something creative like reverse mortgages, but then you're losing your home). So when the need arises, your kids will have options available for them to receive college loans at decent rates (there are many deferred and no interest loans as well).

[Blueface]

I will provide a slightly different perspective.

Don't save in a 529 or any college fund for your children unless you have your own retirement funds covered first and foremost.

College loans are easy to apply for and receive. There's no such thing as a retirement loan (well maybe something creative like reverse mortgages, but then you're losing your home). So when the need arises, your kids will have options available for them to receive college loans at decent rates (there are many deferred and no interest loans as well).

Good advice but in his case, looks like his parents are doing the same thing I did for my two grandchildren, ensuring their future education.

As mentioned, in FL, we have the prepaid college fund, at today's prices, locking it in, with no future increases. That works out quite well. As an example, I bought my grandson's five years ago for $25,000. In January, I got my granddaughter's and it was almost $60,000. Don't want to know what it will be in 18 years.
15 years ago, I paid $8,000 for my daughter's and $7,000 for my son's

[themoneycollector]

A prepaid plan does sound interesting and economical considering how tuition goes up steadily.

So what happens if they don't go to a FL college, do they reimburse anything?

[Silound]

Personally, I would be looking at Zero coupon bonds right now. Low face cost, tax advantages, the ability to plan for an exact duration to maturity, and the ability to lock down a given return now in uncertain economic futures are all huge benefits to education investments.

An ESA account (formerly an educational IRA) with an even split of duration ZC bonds and duration-value stocks (I like ExxonMobil, DollarTree, and Microsoft) should cover an education 15 years down the road fairly well.

[floydpink]

Good advice but in his case, looks like his parents are doing the same thing I did for my two grandchildren, ensuring their future education.

As mentioned, in FL, we have the prepaid college fund, at today's prices, locking it in, with no future increases. That works out quite well. As an example, I bought my grandson's five years ago for $25,000. In January, I got my granddaughter's and it was almost $60,000. Don't want to know what it will be in 18 years.
15 years ago, I paid $8,000 for my daughter's and $7,000 for my son's

I'm almost half paid for my daughter's and it was $18,000 prepaid and 100 bucks comes out of my checking account each month.

Kinda apples and oranges unless the state you live in has prepaid college.

I'd never want to strap my child down with paying off student loans and come from a family that believes you owe it to your child to put them through college, then they're on their own.

[floydpink]

A prepaid plan does sound interesting and economical considering how tuition goes up steadily.

So what happens if they don't go to a FL college, do they reimburse anything?

Yes, they transfer it , or a portion of it, to the out of state college.

If they get a bright scholars or other scholarship, or don't go, you get the money back without interest.

The only possible way to lose is if the state goes insolvent, at which point, we're all screwed anyway.

[CRIMPS]

Thanks for the responses. This is exactly why I asked...

[OLS]

The biggest thing is putting the money away regardless of the plan.
THE BEST ADVICE is the simplest. Doesn't MATTER what you use it for in the end. The simple
act of putting away money and foregoing that box of BHK 56 or sailboat or dumb garage sale find is
what is paramount. I spent my life grabbing this DVD, this box of cigars, this bag of weed, and now
I am 50 and have NOTHING. Well, that's not true, last year I started saving like a fiend So I DO have
something after all, but not what I could have! But two things helped me survive it all....
NO WIFE OR KIDS, and NO debts whatsoever. When I pay cash for my cabin in the mountains
it will end up being worth it, all the cigarettes quit, the weed stopped, the realization that
you can take NONE of that crap I used to buy WITH ME when I pass. Sure puts a reversal on
the old hoard instinct.

My boss pulled a few technicians off sales calls and made em go to Bartlett yesterday to pick up
his new antique gas pump. SURE, it's cool, a 1950s model Texaco pump shell. But WHY?? Why own
it at all. He buys cars the same way. I am sure his son just rolls his eyes as his inheritance is
blown on cars he will have to liquidate (or add to, who knows.) But I also watched my Dad do the
same thing, packing away tools and other stuff I have to lug around now. I am thankful for a lot of it,
but it is an anchor these days. He never thought cancer would take him so early. No one ever does.
SAVE that money boys. One day there will surely be an excellent use for it, and you JUST might get
to keep that change after someone else spends it. :r

[ChicagoWhiteSox]

Brad, you can't take your saved money with you either. Spend a little, and go ahead and get that special bag of hybrid weed brother:r:r

[CigarNut]

THE BEST ADVICE is the simplest. Doesn't MATTER what you use it for in the end. The simple
act of putting away money and foregoing that box of BHK 56 or sailboat or dumb garage sale find is
what is paramount. I spent my life grabbing this DVD, this box of cigars, this bag of weed, and now
I am 50 and have NOTHING. Well, that's not true, last year I started saving like a fiend So I DO have
something after all, but not what I could have! But two things helped me survive it all....
NO WIFE OR KIDS, and NO debts whatsoever. When I pay cash for my cabin in the mountains
it will end up being worth it, all the cigarettes quit, the weed stopped, the realization that
you can take NONE of that crap I used to buy WITH ME when I pass. Sure puts a reversal on
the old hoard instinct.

My boss pulled a few technicians off sales calls and made em go to Bartlett yesterday to pick up
his new antique gas pump. SURE, it's cool, a 1950s model Texaco pump shell. But WHY?? Why own
it at all. He buys cars the same way. I am sure his son just rolls his eyes as his inheritance is
blown on cars he will have to liquidate (or add to, who knows.) But I also watched my Dad do the
same thing, packing away tools and other stuff I have to lug around now. I am thankful for a lot of it,
but it is an anchor these days. He never thought cancer would take him so early. No one ever does.
SAVE that money boys. One day there will surely be an excellent use for it, and you JUST might get
to keep that change after someone else spends it. :r

While I would hope that there is something for our kids left when my wife and I are gone, that is not what our savings is for.

Our savings -- that my wife have worked very hard to accumulate -- is for my wife and I to use when both now and we retire. We have told our kids not to count on any inheritance. We want to be able to travel and enjoy things during our retirement.

I spend my "hobby" money on cigars, tequila, wine, etc. If someone chooses to spend theirs on antique gas pumps then that is their choice...

[mosesbotbol]

College is a scam and not worth the investment to the majority that go. They are all in collusion and have been selling a dream with has become this generations nightmare. How many have 50K+ debts on a degree that worth no more than flipping burgers. I know a few who spent 120K on their child to land a 30K job. What’s the point? College is not and should not be for everyone. My Philosophy degree is good for wiping one’s rear; not much more…

That being said, some kind of saving plan should be used to help with whatever post high school training your child may want to go in.

The whole idea that college is supposed to land someone into the middle class or secure a job really makes me laugh.

Consider (in conjunction with savings) guiding your child into activities that merit scholarship. Also, there's a ton of money being given away every year and you just have to go for it. It takes time and effort, but considering the hours vs. manual labor hours to accumulate the same amount; the scholarship money is quite attractive.
Vocational training is the best of both worlds. Not only does it ensure a career and good income at an early age, it allows for one to have an income and go to school (if they want) or spend the money on really world experience. Most of the rich people I know aren’t rich from their degree, but from their vocation.

Sorry for the rant, but also think of how that money can work for you later in your life.

[CigarNut]

I think college can be a good investment. It all depends upon the individual student, the college, and the degree. I finished school with debt, but my job was a good one -- one that I could not have obtained without a degree.

In addition to course-specific studies a good college will teach students general (and specific) problem solving and study techniques that can be applied in many ways to help one get through life.

One of my sons was not suited to college -- it did not provide what he wanted out of life and my other son seems to be doing quite well. Not all things are for all people...

[themoneycollector]

Our savings -- that my wife have worked very hard to accumulate -- is for my wife and I to use when both now and we retire. We have told our kids not to count on any inheritance. We want to be able to travel and enjoy things during our retirement.


I think college can be a good investment. It all depends upon the individual student, the college, and the degree. I finished school with debt, but my job was a good one -- one that I could not have obtained without a degree.



well said, I agree on both points.

I've heard far too many stories of people who didn't save enough for themselves for retirement and didn't enjoy what they worked most of their lives for.

Also, the statistics are on the side of college grads, but it's not for everyone nor is it any type of guarantee. You really have to make the most of life and keep trying to be successful, whether that's with a college background or not.

[Silound]

I think college can be a good investment. It all depends upon the individual student, the college, and the degree. I finished school with debt, but my job was a good one -- one that I could not have obtained without a degree.

Could not agree more. An education is worth exactly what you WANT it to be worth, and exactly what you MAKE it worth.

[billybarue]

First and foremost take advantage of non-taxable (Roth IRA), tax-deferred (Conventional IRA), and company matching (401K) investments for yourself. Your best return on investment will be from these mechanisms which avoid or delay taxes, or, in the case of a 401K have your company add to your compensation in the form of retirement funds.

After that plenty of advice on 529 plans are on-line.

Many states have free in-state tuition for members of the National Guard at any state school (or match the funds for private schools). Essentially, a 100% scholarship at some very good State schools. Seek out every scholarship opportunity. Take advantage of low-interest student loans - not a good deal now but that may change in future. Nothing wrong with stressing the kid has to help pay for school by working. Internships are an excellent way to get work experience in chosen field that will be invaluable on applications for jobs (or grad-school) when they finish their baccalaureate.