.

[dvcgirl]

I'm glad you qualified that statement with "'most people", because that is not our case. We are not the bigger car, bigger house, bigger credit card people - thank goodness.

Yes, dvcgirl - we are starting over, for the third time. While we don't have zero put away, we do have some put away. It's a start, and we're really going to give it a workout shortly. Hmm, 30% - in 2-3 years that might be doable, barring any more catastrophies coming our way. We always do have the cash-out option. I bought the no-frills version of the pre-paid plan because I do expect our kids to get scholarships and contribute to their education, as I did.

Well, it sounds like you're getting your financial lives in order.... I will say, that while you may not be "bigger car, bigger house, bigger credit card people".....You are definitely "lots and lots of vacations to Disney World people"....lol! Seriously, four trips in a year, even if you do live in Florida is a lot of discretionary spending for a family with no emergency fund and no retirement savings. But you said that you're going to be cutting that out for awhile, and I'd say that's a good (and necessary) thing.

Not that this is you guys....because it does sound like you're trying to turn your financial ship around. But I think we need to create some new "countdown ticker" thingies for poster signatures. Instead of "3 Months, 24 Days and 9 Hours until Christmas with Mickey!".....we should have "20 Years, 3 months and 27 days until I start my new job as a greeter at Walmart at age 70!" Or..."30 years, 2 months and 3 days til I move into my kid's basement!"

 

[rumrunnergirl]

.

 

[allison443]

I don't live in Florida, but over time on the disboards I have been in a number of college discussions. I have seen other posters who have mentioned the prepaid plan as well as the Bright Futures scholarship program which your state has. From what I have read it seems those are great programs!! I wish our state had those programs, especially Bright Futures!

Good luck to your family!

 

[MrsPete]

It's great to give them a childhood filled with goodies and help them with college, but think about how they may feel as adults when they may possibly have to provide financial help to their elderly parents.

Another possibility is that if the kids leave college burdened with student loans, they may very well find themselves UNABLE to help their elderly parents, even if they want to do so.

I'm foreseeing that in the next few years we'll be taking in an elderly relative who probably won't be able to live alone for much longer. We have two teenagers at home, so it'll be crowded around here, BUT we can manage this because we don't have any debt. To make things comfortable, we'll probably end up turning our office into a bedroom, and we'll add another bathroom. IF we were paying a mortgage on the house, and IF we had car payments or student loans, we would be in a pickle: We wouldn't feel that we could turn her away, but we also wouldn't have the money to manage the house comfortably -- much less continue to save for our own retirement! We live in the world of braces, teenaged car insurance, and college-is-just-around-the-corner; many people who live in this world simply cannot bring in another person.

 

[MrsPete]

The point of my post was in reference to college savings vs. retirement savings and what will count towards/against my kids, not pick apart my vacations. ;o) I doubt a week of camping at the Fort over Christmas will force us to move into our kid's basement - I don't know if that was meant to be snarky or what. We're camping at 40% off, we won't be visiting the parks, etc. We can get to WDW & back on less than a tank of gas ($35). The cost cutting goes on - you would truly be amazed at how little we spend - but that's not the point of my starting this thread. The reason I said we won't be going to WDW next year is because I had a feeling someone might mention the ticker, but anyone not in my family really doesn't have the facts to make any comments on that. I'm not trying to be mean, but you don't know what went on behind the trips, or who financed them.

Sorry you took offense at what's a natural bounce-off from your original question. In a situation in which someone's looking at choosing between two necessities, it's to be expected that people essentially say, "Consider the big picture. What could be changed so that neither necessity is compromised?"

 

[dvcgirl]

Many of those trips were gifts from my father in law, or really low budget.

We do have an emergency fund and we do have some retirement savings. I have a brokerage account and several other accounts, but not an official IRA. We have had nice nest eggs built up several times (and no, the money didn't go to Disney) and we have nice equity in our house. We aren't scraping by or spending every last dime at Disney.

The point of my post was in reference to college savings vs. retirement savings and what will count towards/against my kids, not pick apart my vacations. ;o) I doubt a week of camping at the Fort over Christmas will force us to move into our kid's basement - I don't know if that was meant to be snarky or what. We're camping at 40% off, we won't be visiting the parks, etc. We can get to WDW & back on less than a tank of gas ($35). The cost cutting goes on - you would truly be amazed at how little we spend - but that's not the point of my starting this thread. The reason I said we won't be going to WDW next year is because I had a feeling someone might mention the ticker, but anyone not in my family really doesn't have the facts to make any comments on that. I'm not trying to be mean, but you don't know what went on behind the trips, or who financed them.

I just wanted advice on if it is worth it to have a pre-paid college plan, or no college funds. I believe I have received the advice I need - keep the pre-paid plan, and start socking away into a Roth after I finish with the 3-6m living expenses fund.

Thanks again for everyone's help. Have a good one.

No offense meant.....really. I've been on this board for years now and have seen many, many posts like yours. Too many to count really. Most of the time I don't even both answering anymore. Most people in your situation go with their heart and pay for college at the expense of their own retirement. If you were to sit down with an honest financial planner, he'd tell you what I did....that you shouldn't be contributing to your children's college education at all at this point. Then you'd tell him that that isn't an option and he'd work up a plan where you sort of "split the difference" while laying out the consequences for your nest egg as a result of that decision.

The only reason I answered at all is because you mentioned that you read Dave Ramsey's website in which he gives a "one size fits all" recommendation for retirement savings. He tells 20 year olds to save 15% and 60 year olds to save 15%....even if both have zero savings and are beginning at square one. I just wanted to point out that 15% won't work in your situation if you plan on retiring in your mid 60s.

I wish you the best of luck....and I wasn't being snarky about your vacations because you did mention that you were cutting out future trips. I took that as an admission that you needed to cut your discretionary spending....something I'd admire in your situation. If you had mentioned that all of the trips were gifts from family members I wouldn't have brought it up at all.

 

[dvcgirl]

Another possibility is that if the kids leave college burdened with student loans, they may very well find themselves UNABLE to help their elderly parents, even if they want to do so.

Oh, I hear you. The student loan situation is completely out of control in this country. It's *huge* to have your kid graduate debt-free from college. My DH's parents paid for 100% of his tuition. He was the only kid to go to college in his family. My parents had three of us and came close to funding it all with scholarships, grants and some of their money....but we were a little short in the end, and so I came out with a couple of very small loans that I knocked out before I even met my husband. However, our parents were savers....and were saving for their retirement and college in their 20s. Even starting to save for retirement in your 30s puts you ahead of the curve these days. Many don't start until their 40s and don't sit down with a financial planner until their late 50s....when it's too late to make up serious ground.

And yeah, I'm more of a "big picture" kind of person. Pre-paid college versus, 529s or ESAs or whatever.....that's all just background noise to me when I see "late 40s and little to no retirement savings".

I read an article recently by a Fee Based Certified Financial planner where he talked about having to deliver "bad news" to clients on a daily basis regarding their retirement prospects. He found it rather depressing.

 

[HunnyPots]

OK after re-reading your original post, I revise what I first stated. I didn't catch that you're in your late 40's already but your children are many years from college age. Sorry, guess I just got excited when I read "pre-paid college"!

At this point in your lives, you need to be stashing away every cent that you possibly can and avoiding debt like the plague. That's where we are also.

Now is the time to start talking to your kids about the importance of good grades! Get them on the right track now with good study habits.
In high school, it is so important that they take the most challenging classes offered and that they make top grades, keeping their class rank and GPA as high as possible. If they manage to do that, college can and will be affordable, provided they don't get their little hearts set on an expensive private school. A good education can be affordable!

 

[Planogirl]

We were slammed by some traumatic situations and those really wiped out our savings. Luckily we still have a healthy pension set aside.

We also had some savings for DS' college but it took a fair amount of damage from the stock market collapse. It's certainly not as much as I'd hoped at this point. I expect that we'll need loans to get him through college but I've also heard that the loans aren't as readily available as they once were. Has anyone heard much about this?

 

[dvcgirl]

We were slammed by some traumatic situations and those really wiped out our savings. Luckily we still have a healthy pension set aside.

We also had some savings for DS' college but it took a fair amount of damage from the stock market collapse. It's certainly not as much as I'd hoped at this point. I expect that we'll need loans to get him through college but I've also heard that the loans aren't as readily available as they once were. Has anyone heard much about this?

How old is your son?

Right now the credit markets are continuing to contract in a very big way and so credit in all forms isn't available as it was just a year ago. I recently read an article in the New York Times about kids scrambling to find loans at the last minute as they ended up getting a lot less than they thought they'd get. I wouldn't expect things to get much worse in the credit markets, but I also wouldn't expect money to flow as it has in the past for quite awhile...

 

[crisi]

OK after re-reading your original post, I revise what I first stated. I didn't catch that you're in your late 40's already but your children are many years from college age. Sorry, guess I just got excited when I read "pre-paid college"!

At this point in your lives, you need to be stashing away every cent that you possibly can and avoiding debt like the plague. That's where we are also.

Now is the time to start talking to your kids about the importance of good grades! Get them on the right track now with good study habits.
In high school, it is so important that they take the most challenging classes offered and that they make top grades, keeping their class rank and GPA as high as possible. If they manage to do that, college can and will be affordable, provided they don't get their little hearts set on an expensive private school. A good education can be affordable!

Even without good grades, depending on your state school system, good educations can be affordable. The state school I went to has a tuition of about $6k a year. Many of my classmates were living at home, working part time jobs (or often full time jobs), and covering their own tuition without loans or financial aid.

On the other hand, I aced the SAT and had a 4.0 when I first went to school 25 years ago (my recent college experience was my second time through) - and got no financial aid, and a $100 merit based scholarship (after putting in a hundred scholarship applications) - even in 1984 that didn't cover one class worth of books. I got several "honorary" scholarships - no money, that went to someone 'needier,' but my grades got me a pat on the back. My parents - who are not rich - were well enough off that we didn't qualify for financial aid or grants - other than loans - which we didn't take and my first college education was also out of pocket. I did get a full ride student leadership scholarship my senior year for work I'd done with some student organizations. (My husband, who had a single mom without a lot of money, paid about 20% of his private college tuition - in loans - but the rest was covered in grants and work study). I'm not planning on good grades doing anything for my kids regarding making college affordable. If they get scholarships, that will be great.

 

[LuckyMamaInDE]

dvcgirl, my dh is one of those CFPs who has to tell clients they don't have the money to do what they want to. I'm afraid a good portion of the Baby Boomers are in for a rude awakening...

On the college front, a few years back a regular Dis poster mentioned the boards at College Confidential (talk.collegeconfidential.com) Some of the posters are quite obsessive and frightening but the "parents forum" is a goldmine of information about the search process, the application process, need vs merit money available, etc. I encourage everyone with jr high/early high school students to start reading RIGHT NOW!

 

[Lucky4me]

The answer for me is, it's all a wash. Do what your gut tells you to do.
You're starting late to save for retirement anyway and you've only been in the plan for a year, so it's not a huge amount of money.
So many different things could happen over the next 20 years. Your kids could decide not to go to college and the money could go to you. You or your husband could become ill or disabled and all your retirement money would go to that until Medicaid kicked in. Unless you've socked away a few mil, or hide assets from the government, I don't think it much matters where you put your savings.
Yes, I'm a disgruntled former saver, who lost big in the stock market and then whose husband was hit with a catastrophic illness last year. We played by all the rules, but didn't see a million dollar hospital bill coming. Insurance only covers so much and Long term Care is a joke. You have to not only be smart in this economy, but very lucky too.
Wow I'm a burst of fresh air, huh?

 

[dizkids]

Here for some learning from all you smart dis'ers.

 

[jodifla]

Many of those trips were gifts from my father in law, or really low budget.

We do have an emergency fund and we do have some retirement savings. I have a brokerage account and several other accounts, but not an official IRA. We have had nice nest eggs built up several times (and no, the money didn't go to Disney) and we have nice equity in our house. We aren't scraping by or spending every last dime at Disney.

The point of my post was in reference to college savings vs. retirement savings and what will count towards/against my kids, not pick apart my vacations. ;o) I doubt a week of camping at the Fort over Christmas will force us to move into our kid's basement - I don't know if that was meant to be snarky or what. We're camping at 40% off, we won't be visiting the parks, etc. We can get to WDW & back on less than a tank of gas ($35). The cost cutting goes on - you would truly be amazed at how little we spend - but that's not the point of my starting this thread. The reason I said we won't be going to WDW next year is because I had a feeling someone might mention the ticker, but anyone not in my family really doesn't have the facts to make any comments on that. I'm not trying to be mean, but you don't know what went on behind the trips, or who financed them.

I just wanted advice on if it is worth it to have a pre-paid college plan, or no college funds. I believe I have received the advice I need - keep the pre-paid plan, and start socking away into a Roth after I finish with the 3-6m living expenses fund.

Thanks again for everyone's help. Have a good one.

People don't quite get that when you live in Florida, Disney vacations AREN"T all that expensive.

Anyway, another thing you might do is post in your subject line "Florida Prepaid Tuition?" that might draw more people who have direct experience with it.

DS is only 7, but we've had it since he was 1.

Literally ALL my Fla. friends have it, and TO A PERSON, they've all raved about it.