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View Poll Results: How much do you contribute to your child's education
None 65 31.25%
less than $100 a month 31 14.90%
$100/month 29 13.94%
$200/month 17 8.17%
$300/month 14 6.73%
$400/month 8 3.85%
$500/month 5 2.40%
more than $500 month 13 6.25%
Something else (please explain) 26 12.50%
Voters: 208. You may not vote on this poll

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Old 03-09-2010, 08:27 AM   #1
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How much do you put away for child's college?

We have a just turned 2 year old and, after a lot of deliberation and stress, decided to open a 529 as the means for his education. Currently, we are putting $200 in it a month and, when we opened it in 12/09, we put in the amount that would have equaled $200 a month up to that time. We intend to put at least $200 a month in it for him; however, I'm not sure if I'm not putting in enough or what I need to do. Calculating it, it seems by the time he goes to college, he will be 19 because of where his birthday falls, so he will have $45,600 at the very least if we don't have another market crash. Then, while he is in school, another four years would equal another $9600. This is all without interest from the account. I'm unsure if it's enough, but we also have to worry about retirement, etc.

If it's not too nosy, I would love to hear what others are putting away in anticipation of their child's education to see if I'm in a decent range or if I need to figure out a way to contribute more -thanks!
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Old 03-09-2010, 08:45 AM   #2
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We have a 7 yr old whom we purchased a TX prepaid tuition plan for when he was born - 128 any state school credit hours for $2400 a year for 10 years. Just 3 more payments and that contract will be paid in full.
For our 4 year old, they just re-opened the plan last year and the costs have increased. We purchased 400 units (equivalent to 124 credits at University of North Texas or 110 credits at UT Austin) for $3,600 a year for 10 years.
Together we pay $6,000 a year for the plans, but only have 4 years of double payments. So that will be $60,000 for tuition for 2 children. After that we will probably continue to contribute to a 529 to help pay the other half of the cost of college: room, boards & books. Currently tuition, fees, room & board at UT Austin is around $18K a year. That number should at least double in the next 15 years.
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Old 03-09-2010, 08:49 AM   #3
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We live in Canada and the education is completely different. We have RESP that we can put up to a certain amount in and our government will match the same up to a certain limit (I think its $4000 per annum). College here can be paid per semester which is Sept to Decemeber and January to May. We can go to New York and there are a few colleges there and same thing would apply...The mighty bank of mom and dad-cash...lol
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Old 03-09-2010, 09:13 AM   #4
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Quote:
Originally Posted by JamesMom View Post
We have a 7 yr old whom we purchased a TX prepaid tuition plan for when he was born - 128 any state school credit hours for $2400 a year for 10 years. Just 3 more payments and that contract will be paid in full.
For our 4 year old, they just re-opened the plan last year and the costs have increased. We purchased 400 units (equivalent to 124 credits at University of North Texas or 110 credits at UT Austin) for $3,600 a year for 10 years.
Together we pay $6,000 a year for the plans, but only have 4 years of double payments. So that will be $60,000 for tuition for 2 children. After that we will probably continue to contribute to a 529 to help pay the other half of the cost of college: room, boards & books. Currently tuition, fees, room & board at UT Austin is around $18K a year. That number should at least double in the next 15 years.
That sounds so wonderful. I really wish our state would do something like that.
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Old 03-09-2010, 09:19 AM   #5
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We put $100/month into a savings account for our DD3 (the account is in our name, but it is earmarked for her) and have been doing that since she was born. By keeping it in our name, we retain control of the money so she can't decide to skip college and use the money to go run around Europe or buy a car instead.
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Old 03-09-2010, 09:31 AM   #6
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The other important thing is to remember that college savings isn't a long term goal, but more of a short-to-intermediate savings goal. Where a lot of people got into trouble the last few years is that they were still heavy into stocks when their kids were only a few years away from needing they money. Experts agree, you should never have the majority of your money in stocks if you need the money in less than ten years, because you may not have time to recover from a major crash. That means that you should transition out of stocks by the time the child is about eight years old. I would argue that college savings should never be in stocks to begin with, but that a nice bond fund getting around 5% is much safer, but for sure you should not have the majority of college money in stocks past your child's eigth birthday.
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Old 03-09-2010, 09:46 AM   #7
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I'll admit we are behind in college money contributions at this point. We have 3 kids, ages 8, 7, and 22 months. We're only putting in $100 per month total right now. Every once in a while we will put a lump sum into their accounts. My intent is to pay for half of their tuition per child, the other half I expect my kids to contribute. Once dh's job gets more stable, we will probably increase the amount we contribute each month so that by the time our kids get to college we will be able to help with half their tuition. We are also planning to have our mortgage paid off by then, so we can start using some of that money for their tuition. OP sounds like you are off to a great start!
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Old 03-09-2010, 09:50 AM   #8
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We didn't start on the kid's 529s until pretty late. We've been putting aside $300/mth for each child over the last 5-6 years. Unfortunately, we lost a lot in the stock market tumble. I think we're finally back to about the amount we've actually put in, but that means we haven't made a thing on them in all that time. We'd have been better off putting it in a bank account. We've continued to contribute though. We've got one more year before the first goes off to school/three years for the last.

Good for you OP, getting started so early!
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Old 03-09-2010, 10:06 AM   #9
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Quote:
Originally Posted by bettymae1121 View Post
The other important thing is to remember that college savings isn't a long term goal, but more of a short-to-intermediate savings goal. Where a lot of people got into trouble the last few years is that they were still heavy into stocks when their kids were only a few years away from needing they money. Experts agree, you should never have the majority of your money in stocks if you need the money in less than ten years, because you may not have time to recover from a major crash. That means that you should transition out of stocks by the time the child is about eight years old. I would argue that college savings should never be in stocks to begin with, but that a nice bond fund getting around 5% is much safer, but for sure you should not have the majority of college money in stocks past your child's eigth birthday.
thank you. I didn't know this so I will have to keep it in the back of my head to remember when he turns eight. I really had a hard time deciding what to do because of the economy. I wish we had something like Texas so we could contribute to that and not worry about it so much.

Thanks to the others for your honest answers - I would love to hear from others as well - I love this board!
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Old 03-09-2010, 10:10 AM   #10
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I have a couple of Mutual Funds - in total, they probably have about 25,000 now - i have only been contributing 50.00 per month for the last couple of years - i have 2 boys ages 7 and 9! i am planning to use this money towards their college - also our mortgage will be paid off just when my older son starts college, so i figure we'll hopefully have about 500 a month to contribute to college funds.

I realize i need to up this money, but i am also saving for our retirement. I would like to pay for atleast 1/2 their college costs, considering they go to a in-state school etc.
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Old 03-09-2010, 10:31 AM   #11
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We have a 529 plan that we started several years ago after my kids inherited (sp?) money from an aunt who passed away. They each got $10,000.00, and it all went to the 529. Now we just put away any gift money they recieve, which is quite a lot each year. My husbands relatives give money for birthdays, Christmas, valentines, halloween, easter... Its kind of crazy. They also have a lot in savings bonds gifted from relatives over the years.

I also expect my kids to pay part of their own college. When I was in college I paid for all my classes, and my dad paid for my housing expenses. My grandma always bought my books. I never had to take out a loan, and I did get some financial aid grants.
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Old 03-09-2010, 10:42 AM   #12
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DD is 8 months old and we started a 529 as soon as we received her Social Security card. It's with a target-dated Vanguard mutual fund. We opened it with $3K of our money and any gifts she received (including grandparents this was significant). Right now since we are focusing on retirement and moving to a bigger house we are only putting $100/month in. We hope to put more in on a monthly basis eventually.

There are calculators out there that will tell you how much you should be saving. I will add I hope DD will go to a good state school since I can't imagine paying for a private school for undergrad! I also think something will have to change with current college prices as it's becoming completely unaffordable.
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Old 03-09-2010, 10:47 AM   #13
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I put a little back here and there that will be for unforseen expenses ect, but I expect her to do exactly what DH and I did. Work hard, get good grades, stay involved, and earn a scholarship. We both went to college on full tuition scholarships and took out loans and worked summers to meet room and board expenses. I would expect her to do the same. I never expected my parents to pay for college, and knew I needed to get a scholarship to get there. She is bright and perfectly capable of doing the same. If she chooses not to keep up with school work and excel in high school, she will pay the price by bearing the financial burden of her college expenses. If something catastrophic should happen that would prevent her doing well and getting a scholarship of course we would help, and have a plan for funds to do so, but at this point they are not specifically earmarked for college.

ETA: We are paying private school tuition now and expect to do so until she graduates. That money would then be rerouted to go towards college if some sort of unforeseen circumstance amde it necessary. It is pretty close to what tuition at a 4 year in state university would cost at this point.

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Old 03-09-2010, 10:58 AM   #14
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ZERO - the beauty of having well to do inlaws. At the birth of each of our girls my inlaws presented us with a check in the amount of 100,000.

My older sister started a wedding fund for each one of her nieces and nephews as well (she and my bil have no kids of their own) and each has 5,000. However, when my sister heard that our kids were pretty much taken care of education wise she gave each one an additional 2,500. In our family we feel like education and marriages are the two events that can mean so much to ones future but that can cost so much. If they don't marry by a certain age the money is thiers to do with as they please. When my hubby and I finally bought a house she instantly mailed us a check for 10,000. I love her to bits.

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Old 03-09-2010, 11:03 AM   #15
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We have an almost 4 year old. Started a 529 for her when she was born. Have contributed $300/mo. in years 0 - 3. We just upped it to $318/mo. We will continue to contribute monthly until she goes to college.

We are also making extra payments on our home mortgage so that it will be paid off the month before she goes off to college. This will free up quite a bit of cash each month and we will use that to make up any shortfall.

We have another on the way and plan to set up the same system for that child.

As a financial counselor - I would advise to not forget about your own retirement. If I had to choose between retirement and college - I would put the money into retirement. While it is nice to be able to provide your children with a college education - there are also scholarships, tuition assistance, and loans - aside from your child working and contributing to their own education.
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