How much do you save for your kids' college?

[goodfood4ursoul]

I am shocked at the amounts of money most of you can put away for college-we have saved barely enough for almost 2 years of daughter's college (she is in a state school starting her 2nd yr) and it is not for the fact that we have not tried! Your hubbies must make gads of money because hubby and I don't, not even near 3 figures (have not had raises in years, I have a 4 year degree, hubby has tech degree-even have taken losses due to our wonderful economy) We rarely go out, one car is paid for by hubbys work, 1 nice vacation a year (could only afford son and myself this year for disney) and I am not a shopper. We own a home in the sticks of PA. We are frugal and quite boring but we love our lives and enjoy it immensly, we have been through a lot together (job losses, near death illnesses, premature baby, autism) and if going into debt for our kids is part of our lives, then so be it-we will do what we can now and pay the bill when it comes in.......

You GO Brettgirl
I must be your long-lost twin in the sticks of southern Virginia
Our DS left yesterday for his second year of college,
our experience is that we need to make the best decisions for our family that we can,
and have faith because God has always helped us find a way to pay for things.
When you have to go through so much, it is an incredible testimony to
come out the other side together and stronger.

It's easy to come on the DIS and get distracted by the testimonies of what
other people have done for their kids to save for college and to make comparisons with our own experience,
but don't let those things sway you.
Bottom line is- we all do the best we can, no matter our circumstances.

Some are incredibly blessed financially , some are blessed in other ways.
Being less financially blessed is not a commentary on our character
and is not detrimental to the work we have done to raise our kids well,
it is simply different.

I would not trade my life in the "sticks" for all the financial blessings in the world.

 

[LisaR]

I know most people know this but I will put it out there just in case. Make sure you check to see how much your state schools are raising their tuition each year and factor that in. Most universities have previous tuition prices listed on their website.

In FL, our universities are some of the cheapest in the country. When we first moved here 7 years ago, you could get tuition only at a state school for $2500. It is now $6,000 and rising. When my DD starts in one year, it will likely be $6,900 and almost $8,000 by her second year since tuition is going up by close to 15% a year down here. I keep waiting for the bubble to burst but I think I will be waiting awhile.

 

[bettymae1121]

Was just chatting about this with a friend today. I'm guessing you have a flexible job of some sort? I hate that even though you always THINK daycare costs are going to go way down during school years, it isn't always the case. My friend needs to pay for a before and after school program and although it's a couple hundred dollars less than before - It is not a huge savings.

Thanks to the wonderful people on this thread I went into my kids' 529's last night and upped our monthly contribution by $20 each. I figure we won't miss the $40 and maybe I'll try to do that again in the next 6 months or so...THANKS for inspiring me!

Yes, we do have flexible jobs. I work from home FT and DH works 3rd shift, so drop off/pick up won't be an issue. Ironicly we still do need day care as I have to concentrate on work and DH has to sleep! But once school rolls around our need for child care will end.

 

[brettgirl]

You GO Brettgirl
I must be your long-lost twin in the sticks of southern Virginia
Our DS left yesterday for his second year of college,
our experience is that we need to make the best decisions for our family that we can,
and have faith because God has always helped us find a way to pay for things.
When you have to go through so much, it is an incredible testimony to
come out the other side together and stronger.

It's easy to come on the DIS and get distracted by the testimonies of what
other people have done for their kids to save for college and to make comparisons with our own experience,
but don't let those things sway you.
Bottom line is- we all do the best we can, no matter our circumstances.

Some are incredibly blessed financially , some are blessed in other ways.
Being less financially blessed is not a commentary on our character
and is not detrimental to the work we have done to raise our kids well,
it is simply different.

I would not trade my life in the "sticks" for all the financial blessings in the world.

Thank you, you have made me FEEL so much better......I,too, would not trade my life in the sticks nor the circumstances that we have been dealt-it is who I am and who my family IS..........Have a wonderful day!!!!

 

[disykat]

I think still think some people are over estimating AND forgetting about cash flow as a way for average middle income familes who are not eligible for help to save. I'll do simple math, ignoring college increases and assuming you never save more than you started with. I'll also assume one child, recognizing that the cash flow savings would go down exponentially for each extra child.

Let's say your child goes to daycare. At age 5 or 6, they'll go to school and those costs will decrease - let's say by $250. Start saving that. $250 X 9 months of school = $2250. Save that for 6 years. $13500. Then for the next 6 years after daycare ends, save $500 a month. $6000. multiply by 6 years. 36000. So, going into college without anything extra except daycare money, you'd have $49,500.

So, take the same $6K a year you've been saving out of cash flow - you still have that money flowing into the pot. Add in about 2K for stuff you would be spending on him anyway that is now going to be designated as his college expenses. Another 2K from your tax refund. Another 2K from reducing expenditures each year - tighten your belt money. Another 2K from the student's job. Then take 1/4 of the savings - roughly 12K. Now you're at $26K for each year of school.

Then it becomes about the student considering their options. Do they have grades for scholarships? If they don't, is there a community college nearby to do a year or to do part of their schooling? Having the student be able to "go anywhere they want" is great, but might not be feasible for everyone.

My point is, savings is great, but don't panic if you don't have every single penny saved before your student goes off. Unless you've had a job-loss etc, at which point you've probably already hit that savings anyway and may qualify for aid, you'll still have money coming in.

You can do more from cash flow than you think! I think too many people think "I can't save that much money" and just end up taking out much larger loans than necessary because they didn't try.

 

[brymolmom]

I think still think some people are over estimating AND forgetting about cash flow as a way for average middle income familes to save. I'll do simple math, ignoring college increases and assuming you never save more than you started with. I'll also assume one child, recognizing that the cash flow savings would go down exponentially for each extra child.

Let's say your child goes to daycare. At age 5 or 6, they'll go to school and those costs will decrease - let's say by $250. Start saving that. $250 X 9 months of school = $2250. Save that for 6 years. $13500. Then for the next 6 years after daycare ends, save $500 a month. $6000. multiply by 6 years. 36000. So, going into college without anything extra except daycare money, you'd have $49,500.

So, take the same $6K a year you've been saving out of cash flow - you still have that money flowing into the pot. Add in about 2K for stuff you would be spending on him anyway that is now going to be designated as his college expenses. Another 2K from your tax refund. Another 2K from reducing expenditures each year - tighten your belt money. Another 2K from the student's job. Then take 1/4 of the savings - roughly 12K. Now you're at $26K for each year of school.

Then it becomes about the student considering their options. Do they have grades for scholarships? If they don't, is there a community college nearby to do a year or to do part of their schooling? Having the student be able to "go anywhere they want" is great, but might not be feasible for everyone.

My point is, savings is great, but don't panic if you don't have every single penny saved before your student goes off. Unless you've had a job-loss etc, at which point you've probably already hit that savings anyway and may qualify for aid, you'll still have money coming in.

You can do more from cash flow than you think! I think too many people think "I can't save that much money" and just end up taking out much larger loans than necessary because they didn't try.

Excellent point! Although some of your estimates are likely optimistic...after all - once daycare costs are eliminated they are replaced with more food, after school activity costs, etc. But I love your points about cash flow and not taking a HUGE loan and instead covering some of the yearly costs using money already in your budget. Again, some are optimistic - $2K in tax refund - WOW - I would love it (but not enough to change my deduction so that the gov is doing my saving for me)! But we never get a refund...usually owe to state, but sometimes get a few hundred back in Fed. That gives us more out of each paycheck to put into the 529 though - so it's all good.

 

[disykat]

Again, some are optimistic - $2K in tax refund - WOW - I would love it (but not enough to change my deduction so that the gov is doing my saving for me)! But we never get a refund...usually owe to state, but sometimes get a few hundred back in Fed. That gives us more out of each paycheck to put into the 529 though - so it's all good.

Right now there are tuition deductions - so that's what I based the tax refund on. I don't usually get tax refunds either.

Yes, simple math - assuming no need for the daycare money, assuming increases in income covered other increases. Not accounting for interest or inflation - just an example.

This thread really is very specifically about a certain group of people - those who make too much for aid, but for whom it will involve sacrifice to find a way to pay. I have a nephew going to college right now that has need based grants and scholarships - an option we don't have. He faces totally different challenges than we do, and cash flow or savings wouldn't work for him. Different circumstances. I don't see anyone here trying to insult people for whom saving is not an option, simply people being realistic that once you are at a certain income point, you are expected to save or you'll be in for a big shock when your FAFSA EFC comes!

 

[goodfood4ursoul]

Thank you, you have made me FEEL so much better......I,too, would not trade my life in the sticks nor the circumstances that we have been dealt-it is who I am and who my family IS..........Have a wonderful day!!!!

you too!

 

[LisaR]

I think still think some people are over estimating AND forgetting about cash flow as a way for average middle income familes to save. I'll do simple math, ignoring college increases and assuming you never save more than you started with. I'll also assume one child, recognizing that the cash flow savings would go down exponentially for each extra child.

Let's say your child goes to daycare. At age 5 or 6, they'll go to school and those costs will decrease - let's say by $250. Start saving that. $250 X 9 months of school = $2250. Save that for 6 years. $13500. Then for the next 6 years after daycare ends, save $500 a month. $6000. multiply by 6 years. 36000. So, going into college without anything extra except daycare money, you'd have $49,500.

So, take the same $6K a year you've been saving out of cash flow - you still have that money flowing into the pot. Add in about 2K for stuff you would be spending on him anyway that is now going to be designated as his college expenses. Another 2K from your tax refund. Another 2K from reducing expenditures each year - tighten your belt money. Another 2K from the student's job. Then take 1/4 of the savings - roughly 12K. Now you're at $26K for each year of school.

Then it becomes about the student considering their options. Do they have grades for scholarships? If they don't, is there a community college nearby to do a year or to do part of their schooling? Having the student be able to "go anywhere they want" is great, but might not be feasible for everyone.

My point is, savings is great, but don't panic if you don't have every single penny saved before your student goes off. Unless you've had a job-loss etc, at which point you've probably already hit that savings anyway and may qualify for aid, you'll still have money coming in.

You can do more from cash flow than you think! I think too many people think "I can't save that much money" and just end up taking out much larger loans than necessary because they didn't try.

I agree with the bold part.

For the rest, it may sound good on paper but I don't find it works out as neatly and conveniently.

Every family situation is different. This might work for some and not for others.

Regarding daycare:
Some people never send their kids to daycare so there isn't anything extra to save.

Some send their kids to daycare as a necessity and that extra $250 is a huge stretch for them and they are barely making ends meet. When they no longer need that money for daycare, they need to add that back to their daily living fund.

Some people intend on using public schools after daycare but end up with kids that have needs that aren't being met and they need to fund private schools.

I don't know how old your kids are but I found mine to be much more expensive as they age. Clothes cost more and don't forget food......my two teens eat so much it is unreal!

The activities my kids have participated in at the middle school/high school age have been far more expensive than the rec soccer or tiny tots gym classes they did when they were toddlers.

We vacation. Certainly not a necessity but we aren't going to stop just so our kids can go to college. Again, everything costs more. They don't get in for free anymore when they are teens. Tickets are closer to the adult price. Even accommodations need to be considered when you have opposite sex children that are too old to share a bed anymore or a family of five or six who can't fit into a regular size hotel now that everyone is bigger.

Don't forget driving. I am not suggesting a parent needs to pay for a car, insurance, or gas for their kids but some parents are willing to chip in for those expenses because it is a convenience factor for the parent.

Assuming the kid will have a job is just that: an assumption. When you factor in their incredibly time consuming academics, extra curricular activities, and mandatory volunteer requirements, it is even harder to hold a regular job. My oldest has worked for years. She does save but she also spends and I am okay with that. I am not going to pay for her to go to dinner, movies, concerts, etc. with friends. While I still buy her clothes and necessities, if she wants something out of the realm of normal for me (a new purse when she has a perfectly good one in her closet) she can use her own money for those things, as well.

Christmas and birthdays: More expensive as they age. It doesn't have to be but if you were one to buy your toddler some really cool toys, I doubt you are going to give your teen a T-shirt and nothing else.

It can be done. We have done it ourselves so I know it can work. However, I also recognize that everyone isn't as lucky as we are and things don't always work out like you plan them.

 

[markjc13]

A liitle nit here and there, but it's much harder when you're saving for a tirp to DW!

 

[CoP Luv]

It is because of this thread that I looked up the tuition for this year at the University of Illinois. $30K for IN STATE!

We have 19 years until we have to worry about our first going to college (due in a few months ), but I am a PLANNER and a BUDGETER to the max. We have earmarked a good chunck of our investments to college tuition and it is a great start, but I am still worried at how we are going to afford this. Depending on possible income changes, saving a lot of additional money when the baby comes will be difficult. In one of my baby books, it suggests saving $1,000 toward college per month from birth PER KID. Props to anyone that can do that!!!!!!

I think earlier in the thread someone mentioned that they thought (when their kids were small) that tuition increases would HAVE to taper off or no one would be able to afford it. I believe their child is headed off this year. I am thinking the same thing. There is no WAY people are going to be able to afford $60K per year to go to an in state school in IL! Right???!!! I mean this HAS to get better! It isn't sustainable!

 

[disykat]

Every family situation is different. This might work for some and not for others.

Exactly my point. Cashflow will obviously only work if you have some disposable income. Every family chooses to spend their disposable income differently. My point was trying to use cash flow changes to save - regardless of where that cash came from. Sort of like debt snowball, but a college savings snowball - finding money you are used to doing without and saving it rather than putting it back into the pot.

Daycare was an example I used because people kept bringing it up. I've never used daycare myself because I was a SAHM. I found other things to cashflow.

Your example of expensive activities and private school goes right along with my point. THAT cash will be available to use for their expenses when they are in college and you can divert it to those expenses.

We have one in college and another going in a year. We worried, but finding ways to use cashflow has worked for us. We didn't have the money to start saving at birth, but looked for ways to add as they went along and are making it. My whole point is that it doesn't have to be "I'm doomed because I can't save from the moment they're born."

 

[imsayin]

I know most people know this but I will put it out there just in case. Make sure you check to see how much your state schools are raising their tuition each year and factor that in. Most universities have previous tuition prices listed on their website.

In FL, our universities are some of the cheapest in the country. When we first moved here 7 years ago, you could get tuition only at a state school for $2500. It is now $6,000 and rising. When my DD starts in one year, it will likely be $6,900 and almost $8,000 by her second year since tuition is going up by close to 15% a year down here. I keep waiting for the bubble to burst but I think I will be waiting awhile.

In IL, the state universities lock your tuition for 4 years at the rate you enter with. Not much, but it helps.

 

[Pigeon]

Exactly my point. Cashflow will obviously only work if you have some disposable income. Every family chooses to spend their disposable income differently. My point was trying to use cash flow changes to save - regardless of where that cash came from. Sort of like debt snowball, but a college savings snowball - finding money you are used to doing without and saving it rather than putting it back into the pot.

Daycare was an example I used because people kept bringing it up. I've never used daycare myself because I was a SAHM. I found other things to cashflow.

Your example of expensive activities and private school goes right along with my point. THAT cash will be available to use for their expenses when they are in college and you can divert it to those expenses.

We have one in college and another going in a year. We worried, but finding ways to use cashflow has worked for us. We didn't have the money to start saving at birth, but looked for ways to add as they went along and are making it. My whole point is that it doesn't have to be "I'm doomed because I can't save from the moment they're born."

Yeah, but I've found that my costs have never really gone down from when we were paying a lot for daycare. Daycare costs were replaced by violin lessons, regional orchestra tuition, etc., more expensive clothing, more for food, etc. Yes, you dont' have as much of those expenses once the kid is in college, but for all those years leading up, when you'd like to be saving, there isn't so much left to save, so the snowball ends up being pretty small.

 

[disykat]

Okay, I give in. If you don't have the whole amount saved starting from when they're infants, you're doomed! Is that better?

PS - I don't know ANYONE that has had the entire amount saved before their child left for school and somehow, because of the little steps we DID take, we're all making it without taking on huge amounts of debt.

 

[tajz90]

Okay, I give in. If you don't have the whole amount saved starting from when they're infants, you're doomed! Is that better?

Hahhaahaha!

We all managed with help or without help..... Our kids will too!

 

[stacie_d]

Wow...curious to read all the replies and I will. DH and I went to school on tuition scholarships, even my Law degree was covered by one...the rest of the loans are ours and in our names. We are doing well, and have made a deal with DS1 (going into 8th grade). We don't have a college fund for our kids. But we are prepared to contribute 10K to each for college freshman year. That is significantly more than we got, and enough to get them on their way. (Planing instate at WVU...why would anyone go anywhere else?)

Its our plan now...still have a few years to tweak it. (and if they need help, we will be there...)

 

[scottmel]

Wow...curious to read all the replies and I will. DH and I went to school on tuition scholarships, even my Law degree was covered by one...the rest of the loans are ours and in our names. We are doing well, and have made a deal with DS1 (going into 8th grade). We don't have a college fund for our kids. But we are prepared to contribute 10K to each for college freshman year. That is significantly more than we got, and enough to get them on their way. (Planing instate at WVU...why would anyone go anywhere else?)

Its our plan now...still have a few years to tweak it. (and if they need help, we will be there...)

Wow. Not sure of cost of WVU but 10k doesn't go as far today as it did then. With so many saving opportunities for ROTHS for minors, etc. would be worth a look into. I was blessed enough to have my parents pay for my education and I appreciated every bit of it. I couldn't imagine having my DD graduate high in debt. The statistics now are staggering the amount of debt a kid owes when they graduate and so little means to pay it back - lower paying job, hard to find a job, then to have a lot of debt on top of it? I would rather do without today and have DD an easier time. Just my two cents but every little bit helps!!!

 

[stacie_d]

Its enough for a freshman year....at a perfectly fine local university. I have my JD and hubby has his MD from there. We did not have any contribution from the families and we will be paying back loans despite the scholarships for 20 years (significantly inflated because DH was a juvenile diabetic and was/is insulin dependent. That insulin is expensive..but it keeps him alive. He had no insurance coverage for those years.)

Maybe its the cynical folks I work with, but, I don't believe its my responsibility to pay for my kids entire secondary education. But, I will happily help them out if I can. My final thought...if they put the work in, I will help them equally as long as they try.

 

[stacie_d]

duplicate.