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My mom has been going on about the gerber thing. I need to check it out. The return seems to be pretty small.
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Originally Posted by markg91359
DW and I both work and our combined income is pretty high. College tuition in my state is high, but not astronomical. So, the answer for us is just that we scrape up the money when it is due. Our son lives at home, so our expenses are simply for books and tuition.
There is a tax credit available for people who do not have an income above a certain level that is just excellent. I emphasize this is a credit and not a deduction. So, it literally becomes a choice of whether you pay the IRS or pay your son's college tuition. That ought to be a no-brainer for anyone who can afford it.
Even so, it scares me to death. College tuition continues to increase at a rate 2 or 3 times the rate of inflation and colleges keep making excuses for it. States continue to take money away from higher education and spend it on things like Medicaid for the poor which are necessary, but contribute far less to society in terms of growth and economic development.
Graduate school tuition is higher, but if we have too, we'll find a way to pay for that as well.
Do you know what the tax credit is called? It scares me, too. That why the prepaid sounds good to me right now. As far as grad school goes, I hope my daughter decides on the sciences or to do it while employed and have her co pay. Who knows how things will be that far in the future.
Putting on my financial nerd hat for a second (and yes I have a degree in it). Life Insurance in any form is a terrible investment, buy insurance for insurance sake, not because you think you are going to make any money on it because you won't.
The best way to save for college is to put a small amount every month or every paycheck into an ESA or a low fee 529. Or if you're in a position to pay off your mortgage and all other debt with years to spare before college that's fine too as long as you make enough.
Putting on my financial nerd hat for a second (and yes I have a degree in it). Life Insurance in any form is a terrible investment, buy insurance for insurance sake, not because you think you are going to make any money on it because you won't.
The best way to save for college is to put a small amount every month or every paycheck into an ESA or a low fee 529. Or if you're in a position to pay off your mortgage and all other debt with years to spare before college that's fine too as long as you make enough.
Thank you for putting your financial nerd hat on. Makes total sense and I'll share that with my mom about gerber. Great ideas here as well!
I throw $600 a month into a 529 account. I hope to have about 60K saved by the time she graduates college and her dad will match it. Her aspiration is a small private liberal arts education so that is what we are saving for.
I throw $600 a month into a 529 account. I hope to have about 60K saved by the time she graduates college and her dad will match it. Her aspiration is a small private liberal arts education so that is what we are saving for.
For how many years is that? Do you manage the 529 or do you have a financial mgr do it?
The Coverdell ESAs are available with many brokerage firms - my children's are at ETrade. The limit is $2000 per child per year - my ex and I have both set up accounts for the children, and together we can only spend $2k per child. There is also an income limit for the parents. I like the ESAs because if something happens and the child does not go to college or doesn't need all the money in the account, it can be transferred for the educational expenses of any family member of that child.
My children are young, and my company offers the tax-free dependent care spending account. I put in the max $5000 a year (less than half of annual day care expenses), it's taken out of my paycheck automatically, and at the end of the year I use the money as their contribution for the next year.
The college model will be obsolete in 10-15 years. The jobs that will be available in that time do not exist now. The jobs that exist will no longer exist. Change happens. Good idea to save, but dont earmark for "college" ahead of time.
The college model will be obsolete in 10-15 years. The jobs that will be available in that time do not exist now. The jobs that exist will no longer exist. Change happens. Good idea to save, but dont earmark for "college" ahead of time.
I've heard of 529's (two types I believe). Do you use them? If so, how did you set it up and how is it going? I only have a savings account going right now for my daughter with very little in it and an abysmal interest rate. I plan to put in $35/wk. I'd love to hear/read about other ways you're prepping for the future for schooling.
Thanks!
~B
529 plan - find an advisor you trust (or your bank) and set it up.
Put money in it every month and have birthday/xmas money go in there.
We have asked grandparents to donate to that in lieu of gifts, as he has way too much crap already and he is only 18 months old.
Location: Huntersville/Charlotte, NC and Washington, DC
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Thanks, D. I'll check it out. Can I get this through any bank, you think? Maybe I could close that savings account an open one of these instead.
To be honest, Braun, I had no idea of its existence before I started my current job at my credit union. I came to that job from a big bank who did not offer a Coverdell. I'd search banks in your area to see who offers it.
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