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<p>My money market account is paying something like 0.1 percent and my checking account pays 0 percent so there isn’t a big difference. My income is highly variable and includes foreign components that don’t provide statements on a calendar year basis so I like to give Uncle Sam a big chunk of change to ensure that I don’t under-withhold.</p>
<p>A lot of great savings suggestions for the soon to be college parent. </p>
<p>Like many on this thread, my family has always lived beneath our means. We do try to take advantage of any “perk” programs we find that work within our spending plans and don’t cost us any money to join. For example:</p>
<p>My DH travels a great deal for work, and accumulates a large quantity of ff miles. With these, along with ff miles accumulated from credit card, we can usually swing free airfare for one nice family (of 4) vacation a year. He also accumulates hotel points, so we rarely pay for hotel stays. When DD and I went on college visits, all hotels and flights were free. </p>
<p>We also have a Upromise account, and I do alot of my shopping online through their portal to accumulate cash back - I always try to find what we need online, to compare with local source’s price. Much of the time I can find it cheaper online. </p>
<p>DD shopped for her textbooks and dorm stuff online and added over $50 to the account in a month! I comparison shop religiously, so when I am looking to book hotels, buy through e-bay, a retailer or discounter, I go through the portal. I also earn cash back on gas, groceries, and even restaurants if I use my registered credit card. This past year we accumulated about $250 in the account and I just requested a check from them. This money will pay for 2nd semester books (which will be ordered using the portal to generate more cash back!). So, not only did I shop for the best price, I get cash back for doing it.</p>
<p>Housing - did not buy twice as much as we need. Did not locate far from work.</p>
<p>Debts - paid off.</p>
<p>Food - mostly cook at home. A lot of brownbagging.</p>
<p>Car - replace after 5-10 years.</p>
<p>Clothing - see cars. Buy good clothing that lasts.</p>
<p>Vacations - one expensive vacation in Europe. Otherwise, a mix of family and/or sightseeing one to two weeks each year.</p>
<p>Phones - cheaper non-smart phone plans. Most of us are on pre-paid plans, much much cheaper for the non-gabby.</p>
<p>TV - satellite with MLB (well, we’re not completely frugal)</p>
<p>Just want to add a funny one - we bought a new, larger tv for our family room 2 years ago - while the tv fit fine on the previous tv stand - the cable box no longer fit beside it. We considered shopping for a new “entertainment center” piece that would hold everything and decided against it. Instead, DH made a stand for the cable box out of Tinker Toys - it was meant as a temporary solution until we found an inexpensive tv stand that would hold everything - but 2 years later - we still have our Tinker Toy stand and are quite used to it.</p>
<p>I hope I don’t offend any SAHMs out there…but it would be a great financial relief if my stay at home husband would get a job, even part time. He’s been home for 20 years now and I don’t think he ever intends to go back to work. The youngest child will have a driver’s license in a year and there are two siblings who can drive her around as it is. H is so proud of his frugality in things like clipping coupons, but c’mon, saving $12 at the grocery store cannot compare to having a paying job.</p>
<p>Not offended, MP. I know many families whose SAHS (stay at home spouse–actually they have all been moms) who went back to work full or part time to help pay tuition payments. Of the stay at home dads (n=2), neither have gone back to work.</p>
<p>One thing we have started recently to save on vacations… house exchanges. </p>
<p>We have exchanged our home for ones in great cities and resort towns - right nearby as well as abroad. We exchange houses and cars so we can have exotic or relaxing vacations without paying for hotels, car rental or even meals out (we cook in the kitchen or barbeque on the patio. - We have stayed for weeks somewhere with the same basic costs of living at home. Plus the benefit of exploring, going to the beach, riding bikes, using the pool, and visiting the historic sites that we would never see at home. Often for free.) Teenage siblings can spread out, rather than everyone being cramped into a hotel room. Sometimes we do weekends nearby and sometimes long vacations further away. My kids have explored mountains, beaches, cities and foreign countries even though our budget is tight.</p>
<p>Many thousands of dollars saved… and we put the savings into the college funds.</p>
<p>We try to put as many of our purchases as possible on a 1% cash-back credit card, and pay off the bill in full each month. Those periodic $600 refunds really add up over time. </p>
<p>The added benefit is that our credit card (Wells Fargo Visa) conveniently sorts our purchases into categories (groceries, restaurants, travel, utilities, etc) and keeps monthly and yearly totals and 12-month averages for each category. Makes it really easy to estimate how much we’ll save in groceries, restaurant meals, gas, and energy bills (D1’s room is partially underground and requires a separate heating system which we basically won’t need to use when she’s gone) simply by virtue of D1’s absence. I ran the numbers last night and my conservative estimate is that we can set aside another $500/month in savings before doing any real belt-tightening. We’re going to add that $500/month to our existing automatic transfers to savings, either to D1’s 529 or to our regular savings account. That also allows us to dip a little deeper into savings than we’d otherwise be comfortable with to pay this year’s tuition bill; in effect we can “borrow forward” from ourselves, taking out $6,000 now that we know will be replenished in $500 monthly increments over the next year.</p>
<p>We have been forced to defer licensing teenage daughters to drive - never intended to buy them cars but just having teen drivers is too much for our budget. They can learn to drive with permits, but licensing them would be a big chunk of money each month. Oldest will be at university this fall, won’t need to drive, and her sister will be joining her next year.</p>
<p>Parents of the CC boards, I have a question…</p>
<p>Many of you mentioned not buying a car while the kids were in college and thumper1 mentioned refinancing…</p>
<p>I’m a student - parents are sending me and my brother to college, so it’s pricey. They were thinking of buying a house (as well as a car - we have none atm). Would that result in a lower EFC? Also, in regards to cars…one of my friends was trying to get a re-evaluation on her FinAid from the school she enrolled in, showing her father’s 20k loan on a car as reasons why she needs more money. Does having loans (mortgages, car loans) result in a lower EFC as well?</p>
<p>Thanks, parents! </p>
<p>-MM</p>
<p>The amount of debt you have doesn’t affect your EFC, but the amount of assets does.</p>
<p>So if you have $40K in the bank, and then buy a house with $40K down and a $160K mortgage, you still have $40K in assets.</p>
<p>For cars - IIRC person property isn’t counted. So paying for a car in cash will reduce your EFC every year by a maximum of 5.6% of the cost of your car. I know CSS Profile asks for the model and year, so if you buy two new cars right before college to spend down your assets, it will probably count against you. Taking out a car loan won’t lower your EFC.</p>
<p>People have mentioned changing life insurance policies. Can anyone please enlighten me what we should have for life insurance? Many thanks.</p>
<p>With analyzing our bills, the one area where I am working hard to cut back is spending on groceries. The most important thing is to eat healthy foods and only buy what you need, no more.</p>
<p>
Actually, the FAFSA does not include personal residence in your assets, so you would have $40K less assets and probably more financial aid. Profile does - sometimes - depending on the school take home equity into account, but many schools limit the amount of equity they look at. My kid’s school doesn’t seem to take that into acccount in spite of being a “Profile” school. .
Not necessarily - not every Profile school asks for that information. I know my kid’s “Profile” school does not include that question. The profile includes supplementary questions tailored to the needs of individual schools. But paying for a car in cash will reduce your available cash - thus possibly reducing your EFC (though not necessarily; there is already an income protection allowance of something like $45,000, [feel free to correct me on the amount…] so if you already have below that amount, paying cash for the car will not impact your EFC because you are already below the income protection allowance.<br>
Ain’t nothing cut and dried in the wild and wacky world of financial aid!!! :)</p>
<p>
This is a very difficult question to answer because it varies a lot depending on what your circumstances are and what your goals are.</p>
<p>In the event of a death, are you trying to provide for a non-working spouse, provide for a working spouse, pay all your debts, use it for estate planning, make sure college is covered, how many kids, what are the ages of everyone involved, etc.</p>
<p>In our case, I have a small whole life policy my parents got me when I was a teenager (cost is pretty small), about 10 or 12 years ago we both got 30 year level premium term policies with a fairly substantial benefit which provides our main coverage, and I have a life insurance and ADD policy through my job. Nothing on the kids.</p>
<p>We got our own term policies because the company I worked for at the time didn’t offer a life insurance benefit. And I think it is better to have your own, because someday you may be unemployed or work for a company that doesn’t provide coverage, or you may become uninsurable, which will usually limit you to the minimum your company provides.</p>
<p>Oddly, what helps in our situation is that our kids are in private school. Yeah, I know that means that we could be saving the money for college we are dishing out all of these years. But in my experience, it does not exactly work that way, and I doubt we would have been so disciplined to do so. As it was, we overextended ourselves on a number of things. With the extra money freed up, we would have spend a good part of it or all on enhancing our current standard of living. One tends to spend what one makes and it takes a concerted effort not to go for the better neighborhood, better public school, better car and other quality of life things. We just didn’t have the cash flow with the tuition payments we have been making forever.</p>
<p>So when my son graduates next year, he frees up about $1500 a month that we are currently spending on his tuition. That will directly go towards his college costs. Our neighbor whose kids go to the excellent public schools that our exorbitant property taxes support, is lamenting that she has to somehow come up with $55K a year from, where, when they are already feeling every single pay check. To reduce costs by $1500 a month is not easy to do if you have invested it in things that are difficult or impossible to convert to cash like the landscaping or a basement rec room, a bigger house, commitments to any kind of activities. And, boy, does it hurt to go onto a austerity regiment when you have been spending at a whole other level for a long time. My friends and neighbors all know that I have to scrimp because I am so crazy to put my kids in private school, and they see where I have to cut back whereas they can with impunity go out to eat, buy things without asking the price or having to ask around if someone has a used version. They can buy at Borders and drink at Starbucks without a thought, which I cannot. But when the kids go off to college, my life does not change as much as theirs will if they want to cut back to pay more of the college bills out of current income.</p>
<p>So confused. We have about $20,000 saved in a NY State 529 plan which we’re proud to have put aside, but really not a lot of income right now. But we have a second home that we clear a few hundred a month on, but the equity in it is $200,000 - $300,000, so I think it eliminates my daughter from getting need based aid. I’ve been leaning heavily toward the SUNY’s and she’s on board, loved quite a few of them, but I am holding her back from applying to private school’s because of the finances. Her scores and grades are good, but not like the stats I see posted here on CC! She’s got an unweighted avg. of 88, weighted it’s about 93, and her SAT’s and ACT’s are 1190 and 26. She’s all about math and science and wants to be a Bio major, possible pre-med. I feel she would do better at a SUNY that she could get the good grades and apply to med/grad school without the huge debt that she’d incur at a private. With the economy the way it is, it would be really difficult to take out an equity loan on a rental property, or even to sell it right now without taking a huge hit. Do I try and sell the house, pay off all of our debt, and have breathing room, and also then we may qualify for some aid. I am spending way too much time worrying about this but senior year is on us and decisions have to be made.</p>
<p>We’ve cut back on going out to dinner, cut out the premium movie channels, and she’s working 2 jobs this summer, and frankly her work schedule gets in the way of her doing EC activities. But it’s what she has to do right now.</p>
<p>You may want to run some number through some college calculators and see what you can expect in financial aid from some private schools. First of all, get a current realistic market value price for your second home. It may be a lot lower than you think. Apply for a HELOC and see what the bank thinks it’s worth and whether they will even give you such a loan. That is worthwhile info to have. FAFSA is largely income driven. $250K in parental assets is going to be hit at about $12500, which can still result in a lot of need for these schools that are so expensive. If your D is a top candidate at one of such school, you may be able to get some merit within aid consideration. Where she is just one of the pack, there will not likely be any considerations. </p>
<p>Are you renting it out? If you are, that is a bigger impact on your D’s need since the fin aid calculators hit the income hard, and rental income is rental income.</p>
<p>Yes, it’s been rented for about 9 years. The good part is that it was only worth about $250 when we moved out and it’s worth about $500 now, so at least it was a way for us to save over the years. I think it’s just hit us that we need to sit down with some kind of advisor and make some decisions now. We’ve been living on such a tight budget these past few years, having the pressure of the second mortgage and this mortgage paid off would be a relief. Thanks for answering! My D is a decent student but not at the top of the applicant pool, she’ll get some scholarships, but nothing big so we’ll need to do something!</p>
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<p>What does this mean? </p>
<p>As noted…the value of the rental property is listed as an asset. The rental income is added to your income.</p>