S/O re: college savings - if not too nosy

[lmh2402]

just wondering - when you run calculators, how much does it say you should be saving? And do you actually save that much?

for us, for two kiddos aged 3 and 0, to hopefully attend four year private universities beginning at approximately age 18, the estimates are that we should be saving $2k each month.

we are just not there right now. we are still in major maintenance mode with a very old house, and doing things like creating a nursery, or hiring more childcare, and saving for retirement, etc, etc. it all adds up.

that we are not saving what we "should be" saving is one of the things that makes me sleepless many nights

but we can't just print more money...it is what it is. praying that we will find ways to have cash infusions. but not sure if/how/when. i assume my parents will ultimately leave something specific to education/the kids, but i'm really not 100% certain - i know my dad is very focused on equity between his kids and just because i (will soon have) two kids, doesn't mean they will give any more to us than they would give to my childless brothers / sister. nor would i expect them to. so we really can't count on that for any set amount.

it's very stressful.

anyway, are you hitting your ideal saving each month? or each year? i know some people might infuse with bonus payments. this is one of our hopes/thoughts depending upon the track of DH's current job - who know if this will be even remotely possible though.

ETA: clarifying - i'm not asking exactly how much you're saving - i just want to know what a calculator says you should be saving. and whether you are actually hitting that number each month/year. thanks

[niccig]

that we are not saving what we "should be" saving is one of the things that makes me sleepless many nights



No, we're not saving what we should be saving, as we're paying my tuition. And yes, it worries me. When I'm done, we'll have 8 years to catch up. I will be earning more than I did before, but I still worry.

[elektra]

Well, private university rates are not even within reach at this point. So our calculators are based on state school tuitions.

[katydid1971]

I just looked at the calculator from DC's 529 plan. For my kids to go to the in state Pac 12 university we should be saving about $400-$450/ month based on what we already have saved. If they go to a smaller public college $200-$300 should work.
My feeling is I will pay for a public university, if DC want a private college they can make up the difference.

[lizzywednesday]

We haven't saved anything.

It pains DH, but does not pain me. My parents did not have a "college fund" set up for me, though my mom would have liked to have set something up for us. Her parents did that by asking their grown children to pay rent after a certain age (I think it was 18) and they'd put that money away for the child's wedding. I could see using a similar system to help with college, assuming DD had a job. (I never had a job other than babysitting until I was a freshman in college. I had too many other responsibilities at home to get one and I didn't drive, so I had trouble finding one I could get to.)

While I'd like to send DD to college, I'm not expecting to pay the whole tab. I'm also expecting her to work to earn money for things like books, clothes and fees for extra-curriculars. Like I did.

I'm following the federal student lending debate out of the corner of my eye, as it may end up affecting my last 2 payments.

I don't know whether we will start saving any time soon but it probably won't be what we "should" save - we're also paying for childcare, so that's where our money's going now. And, frankly, I am OK with that now.

[lmh2402]

misery loves company, i guess

our goal is private four year university - we both really would like to be able to offer that to our kids

but based on what we've currently got in DS' 529 and his age, and assumptions for cost increase that the calculator suggested, we need almost $1k /month for him

and for the baby, starting fresh at birth, we also need $1k/month.

the calculator said the estimated cost for private university tuition for four years for my 3 year old, assuming a start by age 18, was a little shy of $500K. and for baby, it was some amount over $500K.

i just don't know how people do it.

[niccig]

misery loves company, i guess

our goal is private four year university - we both really would like to be able to offer that to our kids

but based on what we've currently got in DS' 529 and his age, and assumptions for cost increase that the calculator suggested, we need almost $1k /month for him

and for the baby, starting fresh at birth, we also need $1k/month.

the calculator said the estimated cost for private university tuition for four years for my 3 year old, assuming a start by age 18, was a little shy of $500K. and for baby, it was some amount over $500K.

i just don't know how people do it.

They don't. Saving 500K for college. It can't be done. What you can do though is save as much as you can for college, if you do get gifts or bonuses maybe save some of that. Do your best and when they're at college age you can see what the options are. Your DC may not want that private school you want. They may want to go to a state school for a certain program. They may get a scholarship or a grant.

Just do the best you can now.

[hellokitty]

Ah yeah, we are saving, but I know it's still not going to be enough and we aren't even aiming for private college, but state U.

[janine]

As has already been pointed out, if you are saving for a top 4 yr private college, you have to assume 400K each (conservatively). There is no 529 that can help you achieve that in my opinion with more than 1 child. If you are independently wealthy maybe, but then you won't need a 529. So the sobering truth is unless you are able to obtain a scholarship (very competitive), you have to find another route. Saving aggressively each month (1-2k a month per kid) is also unlikely, you have to live too! So that leaves grandparents, real estate or some aggressive investment (high risk)l We are going with real estate and have a property that I have told DH is for their college. It should cover at least 75% for our kids. Could be more of course, but we are leaning conservative and that extra 25% hopefully woulld be picked up by the 529's.

I agree with a PP, you do what you can. And you never know what your child may want. Of course ideally you save for the top, but again, do what you can and know that it will still be a huge help.

[Jo..]

I just looked at the calculator from DC's 529 plan. For my kids to go to the in state Pac 12 university we should be saving about $400-$450/ month based on what we already have saved. If they go to a smaller public college $200-$300 should work.
My feeling is I will pay for a public university, if DC want a private college they can make up the difference.

We are saving a small fraction of what the calculators tell us. Heck, if we tried to save the full amount for both kids to get a free ride to private school based on projections, that would be about half of our annual income. No way we can swing that.

We are doing what we *can*. My children will have financial help, which is more than I had. I went through college with zero help from my Mom, and paid for it with scholarships, grants, loans, and by working full-time all the way through school.

Public in-state will likely be mostly covered by us. If they choose to go private or OOS, they can make up the difference.

[Binkandabee]

Our calculator for an in state school says we should save $300 a month. We save $75.00 a month and I'm comfortable with that. I'm confident that between loans, work, and scholarships that my kids won't have to go into insurmountable debt in order to pay for college.

[KrisM]

We haven't started yet, but will when the house is paid off. If we save that payment money each month, it should be more than enough to cover all the kids as they come up, according to the calculators.

[rin]

I guess because my parents didn't ever give any of my siblings or me the idea that we would have college paid for, it just doesn't seem like a priority for me. (All four of us did go to four-year private colleges, and we all did so through a combination of loans, scholarships, working part-time, and help from my parents).

For our family culture, it's more important for kids to have a sense of the value of their education, which I think comes through taking on a healthy share of the financial responsibility (whether that's working, loans, earning scholarships, etc). We save some for college, but I do not feel like it's my responsibility to pay for 100% of tuition, let alone living expenses & books. Right now we have DD1 (2) and DD2 (due in June); I don't know if we'll have any more, but I plan to let them know that they will be expected to contribute to the cost of their undergraduate degrees, and that anything beyond undergrad is absolutely their responsibility. If they choose to go to public, in-state school then our contributions will obviously go further, but I just can't get crazed about it. I've read a number of financial planning articles that say it's so much more important to save for your own retirement, since kids can always take out college loans but there aren't exactly a slew of retirement loans available to keep you from a golden years diet of ramen & Spam.

[lhafer]

Neither DH or I had financial help from our parents/families when we went to school. We took out loans and worked.

I have no idea how much we "should" be saving for our 2 girls (6 and 2 right now). And I don't really care. We would love for them to go to college, but they might not. We plan on pushing Jr. College for the first couple of years to get the basics out of the way, then go on to what ever college suits them best. This would keep them closer to home for a while longer (while they mature a bit more) and save a lot of money.

We save $250/mo for each of our daughters. It goes into a 529 plan. Sometimes we scale that back a little if we need to save up more for certain things. But it's a number we are comfortable with, and it allows us to save the maximum we can for DH's retirement.

[theriviera]

We are aiming for 4 years of public. The calculator says that is $600 a moth per kid and we are saving that.

[lmh2402]

We are going with real estate and have a property that I have told DH is for their college.

yes, i guess we have this too...for now. we're holding our condo, but i'm not sure if we'll be able to hold it for forever. i find the whole holding onto it very stressful - it brings its own set of worries and expenses - seen and unforeseen.

the whole thing is just very stressful.

thanks, nicci. i guess i feel like there are so many people who are "doing it," but maybe it's in my head. $500k per kid just seems totally astronomical.

[swissair81]

I think I posted this in the wrong thread.

[niccig]

thanks, nicci. i guess i feel like there are so many people who are "doing it," but maybe it's in my head. $500k per kid just seems totally astronomical.

Because it is astronomical. We've committed to doing as much as we can. It will all work out.

I think rising college costs are a bubble, and one I hope bursts before DS gets there.

[AnnieW625]

When I got the 529 for DD1 back in 2006 when she was about a month old the financial advisor told us to put away $300 per month, we put in $50. I know that is not nearly enough, but I also don't want to put everything in the stock market because I don't want to lose it all. The calculator I just found said we should be putting away $750 a month for a university that costs $25K per year, so at this point right now it is pretty much most state universities in my state right now if you include room and board, and they estimate it will cost over $200,000 if we fully fund it. Honestly and maybe I am just too optimistic, but I think those costs are really high, but like Nicci I hope if we are still in CA when the girls go to college I hope the education bubble bursts first (if one truly does exist). For DD2 because she is 4 yrs. younger the cost is only $500 per month.

If all goes well and DH and I are making similar incomes in 3 yrs. when DD2 starts kindergarten I would like to put the $900 a month we are currently paying for her full time daycare into both of the girls accounts. The 529 would get $450 a month, and then each girl's savings account would get $225 per month, or we'd put $300 in the 529, $300 in DD1's savings account, and $300 in DD2's.

We will most likely have one child in private Catholic high school (if we stay in our current area) at the same time DD1 is in college so we have to think about that as well.

We are fine with public universities as DH and I both went to them. Of course private sounds nice and if there is aid and or my kids are willing to due work study or work outside of school (and can complete their work) then I am not one to say that they can't go to a private school if that is where they want to be. I would like to keep loans to a minimum, and I will really stress that when the time comes.

[goldenpig]

Wow the calculator said we would need $600K for DD and $666K for DS to attend 4 years at Stanford (where DH and I went). OK that does sound like an astronomical amount! That is crazy!

It says we need to be saving $1300/mo for each of them. Currently we are saving $500/mo. (Though we are currently also spending about $5K/mo on their preschool and nanny). I can't believe how expensive college has gotten since we went.

[brittone2]

Wow the calculator said we would need $600K for DD and $666K for DS to attend 4 years at Stanford (where DH and I went). OK that does sound like an astronomical amount! That is crazy!

It says we need to be saving $1300/mo for each of them. Currently we are saving $500/mo. (Though we are currently also spending about $5K/mo on their preschool and nanny). I can't believe how expensive college has gotten since we went.
What is also depressing is that I am not optimistic about what the future holds for their careers-outsourcing abroad (I know this trend is really picking up in pharmaceutical R&D for example, which is what DH did previously. In the past, this was a decent career with a 4 year degree or more....but the trend toward sending this jobs abroad is very obvious. Particularly the work that can be done by someone with a bachelor's degree). Healthcare costs? Inflation? It seems like their tuition costs will be so high, and then their career prospects seem a bit more dismal than our generation (JMO). That's what scares me about large amounts of student loans...earning it back and paying it off when you attended an "expensive" school 10-15+ years ago seemed more doable. I'm not sure how doable it will be for their generation (comparatively higher cost of education, coupled with perhaps more job turmoil, increased risk of job being moved abroad, rising costs of *everything* else...)

[niccig]

What is also depressing is that I am not optimistic about what the future holds for their careers-outsourcing abroad (I know this trend is really picking up in pharmaceutical R&D for example, which is what DH did previously. In the past, this was a decent career with a 4 year degree or more....but the trend toward sending this jobs abroad is very obvious. Particularly the work that can be done by someone with a bachelor's degree). Healthcare costs? Inflation? It seems like their tuition costs will be so high, and then their career prospects seem a bit more dismal than our generation (JMO). That's what scares me about large amounts of student loans...earning it back and paying it off when you attended an "expensive" school 10-15+ years ago seemed more doable. I'm not sure how doable it will be for their generation (comparatively higher cost of education, coupled with perhaps more job turmoil, increased risk of job being moved abroad, rising costs of *everything* else...)

This is why I'm worried. Several people tell me that they got a scholarship or they worked through college or they were able to pay back their loans, so their kids will have to do the same. Problem is while we could all do that 20 years ago, the amount of money we're talking about by the time our kids get to college is hundreds of thousands of dollars. It's not the same situation at all.

[american_mama]

As I said in the other thread, we are not saving enough. I deposited a few thousand per child to start their 529s and have done nothing since. College expenses and vacation costs are the two biggest times when I really feel the expense of having three children.

The calculator here
http://www.savingforcollege.com/college-savings-calculator/index.php
said at a slightly expensive public school, paying 75% of the costs, we need to save $505 a month four our 4 year old, $574 for our 7 year old, and $681 for our 10 year old, so $1760 per month. Obviously, it would be more for private, which is what I'd prefer. $1760 doesn't seem impossible in theory, but given our current distance from that, right now, it seems impossible.

If it makes anyone feel better, my sister and her husband are good savers, financially savvy and active. They have 4 kids and I suspect they are aiming for public college. They do not have 529s and instead will rely on other investments, sale of stock, and other savings. I don't know if it will be enough, but as I said, I believe they have given this plan some thought.

[kozachka]

We don't save anything for college for DS. When he was 4 months old we bought a rental property. We put 20% down and for a few years were paying more than we were getting from rent checks (not to mention the time when we had to evict a tenant and were not paid for almost a year). We also made few large extra principal payments while we were living outside the country and paying less taxes (since our income was foreign source based), so while we are not saving now we did pay forward. MIL is also putting few $K for DS college each year.

I plugged in the amount for 4 years of Stanford less the cost of housing and board (since we live in the area) and less what we've already saved, and we are supposed to save $135 per month, which is more than taken care of by what MIL is putting into 529 plan for DS. I am a bit concerned about IMHO overly optimistic growth assumptions (where do you earn 7% post-tax return on consistent basis these days?!), so think we need to be saving way more than that and MIL is saving more than $135/mos for DS' college, but not enough given my much more concervative assumptions. So I am scared that we won't have enough to pay for DS college as a lot can change in our financial situation before he hopefully goes to college (DH is self employed and his income has been dropping steadily) but also a bit relieved after crunching the numbers. Worst comes to worse, we would take out a loan against equity in our house, or have DS borrow for his education.

I agree with the previous posters that saving for college should be secondary to saving for retirement, so if DS does not end up going to an expensive school like Stanford or gets scholarship/financial aid, then we can use funds from the rental property for our needs.

[jess_g]

We have 3 kids to get through college. We have some savings, but are counting on financial aid, work study, some loans, and spending about 10k per year for their college expenses. We are hoping it will all work out. We are also looking at public universities instead of private but will try to find a school thats right for our kids.

[georgiegirl]

When neice was born 1.5 years ago, my BIL's accountant told them to put $800 a month in the 529 plan if they wanted her to go to a state school (California). I was kind of shocked by that number. We've "only" been doing about $500 a month per kid. It's sad that we will have to supplement that, and significantly if our kids go to private universities.

I doubt tuition can continue to rise so steeply. No one, except the top 5%, will be able to afford to get a college education. If its going to cost $50k a year for a public school by then, who in their right mind would take out loans for that? Unless inflation is insane by then, it won't be cost effective for kids to go to college.

[lmh2402]

my DH talked me a bit off the ledge last night

he seems confident in our ability to hold our rental property and leverage it when it comes time for college

also, we shouldn't have these massive house project happening all the time for the rest of our lives. i mean, how many times can you totally rewire a house or replace windows, right? so eventually we should have more to save

i guess, it does come down to doing the best you can with what you've got

but per a PP, it did make me think that i was even more sure of our decision that we were done after two kids. finances are not the sole reason, but given that we were already strongly intending to stop after two...the financial component just helps solidify that thought.

[ZeeBaby]

We have money saved, but we aren't making regular monthly contributions. We clearly need to, but with daycare, preschool and our current salaries it isn't feasible. My plan is to save the childcare money once they go to public school, but that is looking less and less likely since I am not happy with the public schools in my area.

[jerseygirl07067]

I did not do the calculator since I don't want to stress myself out about it! We're just doing the best we can. Honestly, I'm now more worried about saving for my retirement , since you can't borrow for that. :)

We did do a prepaid plan for DD#1 and DD#2 in our state for a 4 year state school that will cover tuition. So we lock in at today's rates, which I'm so glad we did, since tuition is rapidly rising in our state. Both are paid off and we have several thousand in bonds from my dad that will help with other expenses. If they choose to go out of state we can apply the money but then of course we would be paying the higher out of state rate. Private school is out of the question unless they get a scholarship or plan on going into an ultra high paying field.

For DD #3 we have not put much aside yet, since I don't want to sacrifice my retirement. If I don't have enough for that I'm screwed!! think many people make the mistake of worrying about their children's college fund, but don't save enough for retirement. Not saying that is the case for posters here, but I probably should have been putting more into my retirement over the past several years, though I am glad their prepaid funds are both paid in full!!!