Finally saving for the future!!

[NYEmomma]

Just a post to pat myself on the back a bit...

Last month we not only started contributing to our 401k again but we also finally started a 529 for our daughter.

At DH's old job no one was getting raises for several years, yet the cost of everything else in the world was going up & with DH being underpaid to begin with, we just couldn't afford to contribute. DH got a new job in the spring with a nice pay raise but they didn't have a 401k plan & DH had never gotten around to starting a contribution to our retirement plan through the bank.

But last month DH got a nice raise AND they started offering a 401k so he took the % raise that he got and put it all in the 401k. So we don't really feel the raise, but we're saving for the future now!

And after Christmas and DD's birthday (12/31) she had a ridiculous amount of cash in her piggy bank. I also had saved up cash she received since birth... just never got around to opening the 529. But I FINALLY did! We deposited a lump sum & set up a reoccurring EFT from our checking account. All we can afford is $10 a month right now, but something is better than nothing. And we'll be able to save $10 per month for the next two babies as well without worrying about it hitting our budget. Once we're in a better place financially, we can up the contributions.

 

[preschoolmom]

Congratulations! Both are wonderful accomplishments! Your kids are so young, too!

 

[runwad]

Good job and you'll be surprised how fast small amounts can add up over time!!

 

[arthur06]

 

[lisaross]

What a Great Way to Start the New Year!

Congrats to your family on saving! and good luck with the arrival of 2 more!

 

[Mickey1Fan]

Way to go!!!!

 

[akcire]

Not to burst your bubble, because really I think the first step is the most important. Clearly you know what you need to do.

That said, our daughter is 9 months old. Our finance guy and most of the online calculators estimate that a 4 year degree will cost between $250,000 and $400,000 in the year 2030 (her projected college start date). We are somewhat overwhelmed by that monumental amount, especially considering that does not cover graduate school.

 

[puffkin]

Great job!

After 4 years of no bonus/raise at either job we thought we would be able to do something similar (we have continued contributing to 401K although both jobs stopped the match) but we wanted to start some type of college plan for DS. Word got out that my job (not DH though) was giving a raise. Woohoo. Only problem was that our health insurance (through DH's company) went up more than my raise, so now we are actually making even less money (and thats not to mention all the other increases in daily living expenses). Great

We are still trying to build up our emergency savings to an acceptable level so DS's college fund will have to wait at least another year as all the financial advice I have read says emergency savings and retirement savings should be the first priorities.

 

[bluesaturn]

Not to burst your bubble, because really I think the first step is the most important. Clearly you know what you need to do.

That said, our daughter is 9 months old. Our finance guy and most of the online calculators estimate that a 4 year degree will cost between $250,000 and $400,000 in the year 2030 (her projected college start date). We are somewhat overwhelmed by that monumental amount, especially considering that does not cover graduate school.

Is that for a private school and including room and board for 4 years? That's a depressing figure.

 

[williamson_ja]

Not to burst your bubble, because really I think the first step is the most important. Clearly you know what you need to do.

That said, our daughter is 9 months old. Our finance guy and most of the online calculators estimate that a 4 year degree will cost between $250,000 and $400,000 in the year 2030 (her projected college start date). We are somewhat overwhelmed by that monumental amount, especially considering that does not cover graduate school.

I had a couple of thoughts as I read this.
1. You do not have to go to a prestigious school to have a nice career. You can definitely do things WAY cheaper. For one thing, you can spend your first two years in a community college before transferring over to the "real" college. Your degree will have the college's name that you graduated from. No one ever knows where you spent the rest of the time.

2. My family has never paid for college and neither has my husbands. You CAN put yourself through college. Is it hard? It can be. BUT I do believe that you take it a lot more seriously when you are forking out the money to pay for it than if your parent's pay for everything.

3. Scholarships. There are tons of scholarships available. Most of the time, there are people that get scholarships because they are the only ones that applied. You would be amazed if you knew how much free money was available to students. Where I live, there is a scholarship to our local college that covers about 1/4 of the semester cost that everyone who lives in our area and applies gets.

So, to the AP, don't get freaked out by what other people tell you about college costs. Make your own educated plan that works for your family. So far, we've had 2 kids go to college with no problems on scholarship and a little bit of help here and there.

 

[Belle599]

To the OP, good job and keep it up!

 

[NYEmomma]

Thanks everyone!! I know it's not earth-shattering amounts that we're contributing to either but it feels good to do SOMETHING given how how strictly we budget around home to get by comfortably.

Don't get me wrong -- we're not struggling. But it takes a lot of work on both of our parts to have that security. It's not something that comes easily to us. We're both much more the "spending" than "saving" type.

Not to burst your bubble, because really I think the first step is the most important. Clearly you know what you need to do.

That said, our daughter is 9 months old. Our finance guy and most of the online calculators estimate that a 4 year degree will cost between $250,000 and $400,000 in the year 2030 (her projected college start date). We are somewhat overwhelmed by that monumental amount, especially considering that does not cover graduate school.

Aiy, aiy, aiy -- isn't that a painful figure??

I think by the time our little ones get to college, something will have changed. I mean, it just HAS to. Not because I'm cheap or anything, but just because it's almost getting to the point that there's no purpose for college anymore... after you pay off student loans, you would have been better off financially if you took a slightly lower paying job that didn't require a college degree.

That's just sad. Both DH & I are educated people -- I've got a masters & DH is finishing up his MBA next Fall. We both view education as something valuable and worthwhile, but we'll definitely be encouraging DD to make smart decision about her education.

My parents paid for my schooling 100% -- even grad school. However, I did get some substantial academic scholarships. I also did post-secondary education in high school and earned some (free) college credits towards that. I managed to get my undergrad in 3 years.

DH is, quite frankly, the smartest person I've ever met. He got a full academic ride including room & board. He also got accepted into some Ivies but chose to go to the local state school because they offered him more (his parents didn't offer to contribute anything to his college education). And because who'd want to leave their beautiful fiancee back at home??

I always wanted to pay for DD's school & always planned to. I planned on going back to work after her and her younger sibling got into school & contributing the majority of that income into retirement & college savings. We'd always planned on having a 2nd child, but having a 2nd and a 3rd has thrown a wrench into my well-laid plans!!

At this point, I don't think we'll be able to fully pay for all 3 of their college educations. But I'm hoping that if we encourage them to make wise decisions i.e. post-secondary, attending state public school, living at home, earning scholarships, that we'll be able to pay for the vast majority of their educations. Fingers crossed!!

 

[arthur06]

I had a couple of thoughts as I read this.
1. You do not have to go to a prestigious school to have a nice career. You can definitely do things WAY cheaper. For one thing, you can spend your first two years in a community college before transferring over to the "real" college. Your degree will have the college's name that you graduated from. No one ever knows where you spent the rest of the time.

2. My family has never paid for college and neither has my husbands. You CAN put yourself through college. Is it hard? It can be. BUT I do believe that you take it a lot more seriously when you are forking out the money to pay for it than if your parent's pay for everything.

3. Scholarships. There are tons of scholarships available. Most of the time, there are people that get scholarships because they are the only ones that applied. You would be amazed if you knew how much free money was available to students. Where I live, there is a scholarship to our local college that covers about 1/4 of the semester cost that everyone who lives in our area and applies gets.

So, to the AP, don't get freaked out by what other people tell you about college costs. Make your own educated plan that works for your family. So far, we've had 2 kids go to college with no problems on scholarship and a little bit of help here and there.

I agree with this...

I was never from a family that paid for their children's college education. I went to Community College for 2 years (at about 1/5 the cost of a 4 year state college). I have a 4 year degree from a good school and graduated with under $13,000 in SL's. I worked thru college, not full time, but enough to cover anything non-school related and books and such.

Any dollar you contribute to there future is a dollar they are ahead. Keep up the good work!

 

[akcire]

I had a couple of thoughts as I read this.
1. You do not have to go to a prestigious school to have a nice career. You can definitely do things WAY cheaper. For one thing, you can spend your first two years in a community college before transferring over to the "real" college. Your degree will have the college's name that you graduated from. No one ever knows where you spent the rest of the time.

2. My family has never paid for college and neither has my husbands. You CAN put yourself through college. Is it hard? It can be. BUT I do believe that you take it a lot more seriously when you are forking out the money to pay for it than if your parent's pay for everything.

3. Scholarships. There are tons of scholarships available. Most of the time, there are people that get scholarships because they are the only ones that applied. You would be amazed if you knew how much free money was available to students. Where I live, there is a scholarship to our local college that covers about 1/4 of the semester cost that everyone who lives in our area and applies gets.

So, to the AP, don't get freaked out by what other people tell you about college costs. Make your own educated plan that works for your family. So far, we've had 2 kids go to college with no problems on scholarship and a little bit of help here and there.

1. prestegious college those are the estimated costs of an undergraduate degree at a state school. An Ivy by 2030 will be more like a million dollars.

2. Increasing costs of tutition are making it nearly immpossible to put yourself through school. As an example a family member attended a state school and law school graduating in 1975--total cost of his tuition was less than $10,000.
He worked summers to pay his tutition. That same school today would cost $193,000 for undergraduate and law school (tuition only) not including lliving expenses. Today's price is not in line with the increase in real wages....so unless "todays" sudent is going to be a successful drug dealer or highly paid stripper, I don't think they will make enough in the summers to cover their tution and their living expenses.


3. As to scholarships I understand them. I had a full ride. I went to a state school, there were approximately 38,000 students the year I started, less than 1000 had full tuition scholarships, less than 600 had room & board too. I hope my child will get a scholarship, but I am planning to have to pay.

 

[crisi]

Is that for a private school and including room and board for 4 years? That's a depressing figure.

The lower figure would be for a four state school (keep in mind that the daughter in question is only 9 months old) - not in all states but in many. Ours would cost - right now - over $100,000 per child. The higher figure would be for a private school.

I think something will change - a lot fewer people will get college degrees from traditional schools in the traditional fashion.

But ANY money set aside helps - because when you fill out those college forms, they'll assume you've been saving. And if you haven't, and you don't get grants and neither you or your kid can pay out of pocket - your option becomes loans. And loans will weigh on your young adult. Or you can go to a community college - if that is affordable out of pocket (still would be nice to have that saved) or go part time and work and take longer (but it still would be nice to have that saved).

 

[akcire]

Aiy, aiy, aiy -- isn't that a painful figure??

I think by the time our little ones get to college, something will have changed. I mean, it just HAS to.

I feel your pain. The amount of money made me a bit sick and I thought our finance guy had lost his mind the first time I heard the figure. The more I thought about it.....I realized he was probably right under our current system.

The costs of education are one of the things my DH and I are taking into account before we decide to have a 2nd child. Sometimes it makes me angry we have to think/live that way, but we know it is reality.

 

[crisi]

The costs of education are one of the things my DH and I are taking into account before we decide to have a 2nd child. Sometimes it makes me angry we have to think/live that way, but we know it is reality.

We have two for that reason - well, there are other reasons, but we can afford two "traditional" college educations and a house with three bedrooms and to vacation as a family of four and to save for retirement......More kids = more costs.