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Have I mentioned that Bee is six? I have an English degree, and I didn't even know that.
This child absolutely MUST go to college. She could change the world.
It's very important to me that my girls get a college education. Unfortunately, with college costs skyrocketing, I'm concerned that by the time they're ready to go, the price of tuition will be out of reach for the average middle-class family.
I decided that I'm going to try my best to make sure that higher education is an option for my girls, if they want it. Yesterday, I did something that has been on my list for several months - I made a college savings binder:
In this binder I have three sections. The first section is for the girls' 529 college savings plan information. For the last four years, we have saved $100 each month for our girls' college education. In September, we divided the money evenly between the girls, and invested it in 529 plans.
If you're unfamiliar with Section 529 plans, they're accounts that offer parents attractive tax benefits for saving money toward college, and they allow parents to retain permanent control over the assets. Anyone can contribute to a Section 529 plan, regardless of income. When distributions are made from the account for the beneficiary's qualified educational expenses, there is no taxation on growth of the original investment. Educational expenses can include things like uniforms, books, and even transportation. Click here to research 529 plans in your state.
I also have a section for our Upromise account in my binder. When you register your credit cards with Upromise, a portion of the money you spend with Upromise partners is deposited into your account. You can also invite friends and family to register with Upromise, and designate your child as a beneficiary. Your Upromise account can be linked to your 529 plan(s), and the money will be automatically transferred so that it can begin earning interest. Click here to learn more about Upromise.
The third section of my binder is for the girls' Kid's Club accounts. Our bank has special savings accounts for children, with fun incentives and rewards. One of the girls' favorite Kids' Club events is Swim Night. At our local pool, the bank has a cook-out, a 2-hour swim, and a carnival with games and prizes. Admission is free for the entire family, and the girls look forward to it all year.
I opened savings accounts for my kids right after they were born, because I strongly believe in teaching children about financial responsibility at an early age. In order to become financially secure adults, children need to learn good saving habits, and how to make smart purchases. They also need to learn about the dangers of accumulating debt, and why they can’t immediately get anything they want. Too many people are never taught these financial fundamentals, which is part of the reason why our economy is in its current disastrous state.
According to this college cost estimator, the average cost of annual tuition at a public university in 2021 is estimated to be about $33,546. So, if Bee attends for 4 years, her total cost will be $134,184. So far, she has saved about $1300 in Christmas and birthday money, and we've saved about $2500 on her behalf.
Only $130,384 to go.
Oh man.
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12 comments:
as smart as she is she will have scholarships to help her through.
I am all for kids going to a 2 year collage right after high school it is sooo much cheaper and not such a big culture shock for them. My son is doing that right now and with his scholarship and grant he hasn't had to pay anything for his whole first year of school. I say get the most education for less as long as you can. Even though it is enticing and exciting to go away to a big school. I think it is smarter to stay home for awhile and concentrate on school and get all the education you can for less.
We told my son we cannot afford to pay for your college But you are welcome and wanted to stay home while you go to school and not have to try to live on your own while you do it. Too many of his friends hurry and move out or there family tell them its time to move out and then they have to "take a semester off to work" so they can afford to live on there own and never get to go back.
Saving for college is so huge! We have a couple of investment accounts also. We did not opt for anything connected to college simply because college is not a given in our house. It is highly encouraged (yes, we forced our oldest to go) and happily paid for if the grades are good and there is desire. But, in case of an uninterested kid, I want to be able to divert that money somewhere else without penalties.
Did you know that when you adopt from China they make you sign papers and promise to put the kids through college? Pretty interesting as they don't require the same from their own citizens. Hmmmm.
I wish we had thought thought of college sooner. Fortunately God is faithful in our shortsightedness.
Our oldest is in his 2nd year at a junior college. He was given a full scholarship for which we are very thankful. Next year he plans on working a year (to save up money) and then transfering to a four year.
We can't afford to pay for college for him and figure it would be smarter for him to take out a loan, if necessary, as he'll have more earning years to pay it off than we would. He has a 4.0 though so hopefully he'll get some scholarships.
Heather,
I really enjoyed this post!! As a college student at a private university I can't thank my parents enough for their financial support. I'm not sure what methods they used to save up for this time but I plan to ask them and see if they have advice for me when I have a family of my own.
I also love how you are helping your girls to become fiscally responsible members of society. I wish I had the know-how regarding savings accounts and whatnot when I was growing up... I really think that kind of information would have helped me now that I am living out of the house and will soon be making money of my own.
You are a wonderful mother! Bee and Cakes are SO lucky!
-Stefanie
Ah, you've hit on a topic that's been on my mind lately. Hubby and I are a in a bit of disagreement over opening 529s for our children. Right now we put $20 a month in each child's account, they each have cds, and I give almost all of my spare change to their savings accounts. It's a start but it's not much. Hubby's plan is to work on paying off our mortgage and then use the same amount of money to fund their college and our retirement each month. That's a good plan but I feel weird about not doing more right now.
Heather,
Good for you on taking on the dubious job of saving for your girls college expenses already! I worked in the industry for a few years specializing in retirement & education products. The savingfor college.com website is one of the best that I've found & I shared it as often as possible for clients as well as brokers to better understand how 529 plans work. I don't know what state you live in, but another benefit that some states offer is a state income tax deduction if you contribute to specific 529 plans (usually one sponsored by your state of residence).
Thank you so much for all of your posts! I may not be a mom yet, but all of your pointers have even made a change in the way I live & help with my neices & nephews!
THANKS AGAIN!
It's funny you should post about this today. My husband and I discussed this very issue over breakfast today. We are torn between opening a 529 (which has a higher rate of return but can only be used for college) and a Coverdall account (which can be used for anything once the child is 18)
Don't stress yet, with a smart one like Bee I'm sure she'll have some AP Credits during high school.
I forgot to mention regarding your comment I think sometimes people want the financial help, you're right, but they don't want to do the financial work. They want a way to get money without having to change their lifestyle. That's why get-rich-quick schemes are so popular.
What a great plan!
Had my parents had to pay full fees for Uni I would never have been able to go. Australia has HECS (Higher Education Contribution Scheme) for most of the Uni's. It means the government pays your fees and you start paying it back once you are earning over a certain amount. It is based solely on my income of which as a sahm I have none. I would love to say it was a free education but there were so many other costs involved with my course (one assignment could cost $1000 to produce) so HECS got us out lightly.
I'm like Mummy McTavish & my uni was paid by HECS as well - however the concern is if they will continue the HECS plan for when our children go. I want all of my children to attend uni, so should probably start thinking a bit more seriously about it.
You are doing a great job, Heather.
BTW Bee sure is smart - is she getting special tutoring for gifted children at school?
Renata, she is incredibly smart (and I'm not just saying that because I'm her mom!) and I'm not sure that her teacher really knows what to do with her. I know that they're giving her advanced reading material, because she doesn't fit in any of the other reading groups. So far she seems fairly content, but I'm planning to talk to her teacher at March conferences about the school's talented and gifted program. It's my understanding that it doesn't begin until second grade though.
I never looked to see what the estimated cost was when I went to college 9 years ago, but I'm sure those cost are the all inclusive 5 star package which from the way you guys live is not what she'll be expecting. I'm sure those numbers include things like the best dorm package & meal plan you can buy. All new text books, etc and thats not going to be what she'll need. Don't worry your efforts will make up enough, even is she has to work some... it will still be possible!!
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