I'm assuming many of you with children have set up some sort of college fund for your kid or kids. Any advice on what is the most sound way to go about doing so? I need to get the ball rolling on this. And if the money can be taken out and used for next years PS3 that would be a plus...just kidding.
Look into a Roth IRA (529 as above ^) for yourself (and kids)... then set up an Annuity (need about 100,000 or so to make it really pay out) that pays a monthly dividend, putting the dividend into diversified "Callable" cd's and stocks (for long-term, later-on money). That's how I'd roll anyway. (We started at about $500 in each 529, until then use a "youngsavers" type account, can start at a dollar). 529's are tax-deffered college savings plans that earn interest, btw.
Roth IRA's are good for tax reasons and have a good return rate. If they are athletic or smart, pimp those attributes to get a scholarship or some sort. Lastly, a military scholarship, some of my classmates did that, but I've heard a few are in Iraq now too. You can also make a killing selling your PS3 box on ebay.
Don't pay for your kids' college. Yeah, I'm going to take some heat for this, but nothing made me more self-reliant than working my way through school. On the other hand, your income will probably prevent your kids from getting some of the nicer financial aid that I got. My parents couldn't pay, so I had no choice. But, I have met too many people who are supported by their parents through college and beyond. At some point, they've got to grow up, and this is something you decide, not them. I'm really worried what college is going to cost when I have kids. I mean, college is becoming what high school used to be, and the increased demand has skyrocketed prices. Texans used to be lucky, with affordable state institutions. But the legislature is cutting back on funding, and with deregulation tuition is going up 15-25 percent a year. Ridiculous.
It's a pity that enrollment has been closed, but we got both our kids into the Texas Tomorrow Fund the first year it was opened. It's a version of a 529 that's backed with the "full faith and credit" of the state of Texas, and must be honored. It covers all tuition of state universities, and allows the use of what the state tuition would have been to be applied to any private university, anywhere in the country. (that's a brief description) We're damned glad to have it, obviously, and got it the first year of the program, when it was at the lowest cost. It went up every year until enrollment was closed. The Texas Tomorrow Fund was available for 8 years, 1996-2003, and over 153,000 Texans took advantage of it. The plan's operating expenses are only 0.15 percent of invested assets, which is excellent. Well conceived, well managed, and a damned good idea... brought to you by the other political party of Texas, originally. It's name was changed to the Texas Guaranteed Tuition Plan, of course, so that people would forget that. DD, was that the program you got into, or is it another 529? Faos, good luck. One of the reasons the TTF won't be returning for Texans to use is because of the deregulation of tuition for our state universities and other institutions of higher learning, like that dump in College Station. Tuition has gone through the roof, and is attempting to leave the Solar System. Not a good time to be cutting college grants and aid.
Maybe I'd be better off having my kids take golf lessons in the hope of getting a scholarship then turning pro.
I don't know about you, but I'm counting on my kids to keep us in the lifestyle to which we have become accustomed.
I'm in the same boat. My parents can't afford to pay ANYTHING on my college, but I do get good financial aid. I'm working while I'm at community college, because my parents wouldn't even have enough money to give me for weekly gas and whatnot. That sucks. Between my 25 to 30 hours a week at work and school, school is turning out to be a little tougher than I thought, and I think a lot tougher than most think it could be.
I'm in this school of thought as well. While it's great to pay for your children's college, the intangables of being on your own can't be bought. And who knows- maybe your kid will decide that college isn't for them. Many of the world's self-made richest people didn't go to college. It's a great dream, but college isn't practical for everyone. Of course, this is all just talk, and I doubt any arguments on internet message boards will change anyone's minds about how to raise and care for their children.
While I can see there might be some substance to the argument that making your kids pay for their college might help them out, I disagree. I've read articles in Forbes and Money that claim the absolute best investment you can ever provide your kids for their long term future is an education. I'd sure hate to deprive my kids of that.
Get a 529 plan. Most 529 plans (Vanguard as an example) have a target date plan where the plan manages the money (think asset allocation) with the college target date in mind. All of the 529 capital gains and dividends and interest are tax free. You are actually the owner of the plan. If your kids do not go to college, the monies can be keep in the plan until say your retirement. College cost inflation is currently running at a 7/8% clip (ie faster than regular inflation). This plus college costs varying dramatically between different colleges makes saving the right amount a tough proposition. If you did the numbers, you might be suprised how much you need to save to pay for it all. And you might not be able to get there. There are always grants, scholarships, and loans. One could argue that making your child take a loan out for college might sharpen their focus while in college in obtaining the necessary skills to get a job coming out (like getting a business minor to go with their English major).
I agree. I don't have kids, so I can only speak for what my parents did for me. They always took the mentality that "being a parent never stops". It didn't matter if I was 18 or 90 - if they're around, they're there to help in whatever way possible. First and foremost is getting an education in order to get a good job and be self-supportive. The fact that you boot your kid out at 18 or send them on their own to pay their own way through college doesn't guarantee anything other than a tougher time for them. And I'm sorry, saying that kids that have parents pay their way through college somehow are disadvantaged when they graduate is silly. It's dependent on the individual. There are examples of successes and failures in both groups.
I'd say paying for all of it could be a problem for some kids, but if you have them contribute something toward the cost it could help them learn the value of school and keep them from slacking off...
I don't know how he did it, but my dad put me through college many years ago. He wasn't exactly rolling in money. I didn't even have a job in college. I would wait and wait for those checks to appear so I could run out and by some more mac and cheese.
I agree to a certain extent...I had to pay my way thru college and it made me that way I am today, a cheap ass...I had student loans and paid them off,etc...However, I expect my kids to do whatever it takes to get a scholarship and if that doesn't work, I'll help them, but it won't be a free gift...They have to earn it...I put money aside in savings for college, but like that commercial, I expect to be buying a boat with that money...
