Hi parents! I’ve been out of college for a minute - but I’m currently in my late 20s and as I think about starting a family in the near-ish future, I’ve been pondering this question for a while. The tuition at my own alma mater has literally doubled since I started 11 years ago, and I’m sure that between when you graduated from college and when your own children were preparing to go costs rose exponentially.
How much did you save for college per month/per year for your own children? When did you start (as in, how old were they when you began)? Did you find it enough, not enough, too much? What would you do different as far as college savings go?
We started saving when each child was born. Our goal was to have enough money to pay four year’s tution at a state university. Our oldest will start college in September, and we have met our goal. Of course, she wants to go to a private school, which is more than twice what we’ve saved.
We started saving from when we were married (actually even before that–as soon as we had jobs). When zero coupon bonds were available in our state. we bought enough in zero coupon bonds that should have paid for each child to attend instate U, including dorming room & board. Of course, neither of our kids attended our instate U and our savings was about enough to cover one years tuition, room & board at the private U they attended. Fortunately, S got generous merit award that paid for 50% tuition, which stretched our savings further. Also fortunately, we lived below our means, so we were able to use the earnings that rose over the years to help cover the cost of our kids’ college educations so they could graduate w/o debt.
My spouse and I have always been relatively frugal. We saved as much money as possible, although we didn’t earmark any specifically for college. We paid off our mortgage in six years (when our daughters were just starting elementary school). And then we kept saving, which was good, because my husband ended up being unemployed for six or seven years when our daughters were young. And he lost another job in May of my older daughter’s senior year in high school. Frugality and not having everything tied up in restricted accounts (e.g., retirement) helped us survive. I wish for you better fortune; the fact that you’re thinking about this now is great!
My husband and I started saving when our sons were born using a 529 plan. Our savings allowed both son’s to attend the college of their choice debt free. We were lucky that both wanted to stay in-state and travel expenses are minimal even though they both live on campus. We contributed monthly starting off with $100 but as our income grew, the contributions went up accordingly. Also whenever they received money as gift’s for birthdays, christmas etc… We required they contribute half into the plan. It worked well for us.
When we got married (so before our first was born) we built 3 kids and 3 college educaitons into “the plan”. We only budgeted $80,000 per kid as that was the estimated cost our financial planner plugged in for UofM after 20 years. He was close and at the time we were aghast that they were projecting college costs to rise that dramatically. They did and then some. UofM is much closer to $100,000 all in for 4 years. We came in at right around $80,000 for #1 (out of state) and at $87,000 for number 2 also out of state. #3, well I won’t know the total for 2 more years.
Juillet. The ying/yang of investing for anything is that time is your ally when trying to build money, but people often don’t have much “extra” money when time is on their side (i.e. young).
My advice is to starting saving as much and as early as you can. Any amount invested early helps. It won’t seem like much saving for the first few years, but you’ll be amazed at the amount of money you can save over time. Increase the amount invested as your earnings grow. Determine how much money you will need to save when your offspring are college age based upon current prices and the expected inflation rate of college expenses and plan accordingly.
Personally, we saved enough to pay for much of the cost of an instate, public flagship for four years. This has limited our daughters’ college choices somewhat because they can’t expect to attend any college; however, there are plenty of excellent colleges out there for a reasonable (ha!) CoA (as you well know). We started saving just after our daughters were born. Any unexpected money that came along was added to the savings. (Don’t forget your retirement savings investment though.)
I hope you’re not averse to investing in stocks because that is where your money will grow the most. Invest in index stock funds within a 529 with low, low expense ratios (like Vanguard, Fidelity, etc).
We started once our D was born (she’s a senior now), so our years encompassed the dot-com bust and the financial crisis. It was difficult, but we did not panic when the markets took those bad tumbles because time was (then) still on our side. The last 4 years’ recovery and gains have been particularly helpful.
I aimed to have 4 years of private school tuition by the time she is a senior in high school. 17 years ago, we set aside as much as we could but overall original money was approx. one year’s private school tuition. We also knew that we would/could make up the difference between what we had set aside with current earnings. We have reached our goal.
We saved between $100,000 and $120,000 per kid. Our best saving tactic was to take all the reimbursement checks from our pre-tax day care accounts for each kid and sock 'em into their 529 accounts. We also bought a couple of individual stocks that did well over the years (one did really, really well). We were then able to make up the different out of income, although D2 did get some need based aid her first couple of years of college when my small business tanked from recession impacts… and D1 picked a school that gave her a good merit amount.
We bought prepaid tuition for each baby under our state’s 529 plan. My oldest is 17 and we live in VA. We have paid only about $4000 for each year of college tuition. It is triple that now.
We save as much as we can. For our D1, we started the education fund when she was 4. For D2, we started the same year she was born. We do not make much money and we only have less than one year CoA for in state public when D1 entered college last year. It is impossible to send her to college without merit and need based aids.
We started saving for our children as soon as they were born. Our goal was similar to a few others here…save enough for 4 yrs at our states’s flagship university. (our parents paid about $25K all in; and our DD, who is attending the same school, will cost about $120K before a few merit scholarships; DS hasn’t made a decision yet.)
However our best financial decision was the lifestyle we chose. We lived very frugally straight out of college. With new jobs, we did not rush out and buy new cars or furniture. We lived very modestly, never feeling like we had to “keep up” with our peers. We had a very small wedding. We saved and invested. Our investments grew and we did not panic when the economy nosedived.
A big thing to remember is that how you live will be observed and internalized by your children. My husband and I are ecstatic with our children’s (18 and 20 yr olds) money handling skills. Sometimes they are “cheaper” than us!
Anyway, we are financially comfortable now, but we still value family time over material things. Just because we can afford something doesn’t mean we feel the need to spend. Which reminds me…one of the first real money lessons I remember teaching my children had to do with a school project when my oldest was in the 1st grade. It was a unit on “wants versus needs”. Just thinking about it makes me smile.
Well, I’ve probably rambled long enough…sorry about that.
We did the same as @dadof1 … 529’s from Vanguard and/or Fidelity. We started as soon as each of our kids were out of day care, just moving that part of the budget to 529’s. Our kids both received some merit aid, but neither covered the full cost of private schools, so the 529’s allowed us to take care of college for them, other than our kids covering their expenses and books so that they had some skin in the game.
If they decide to go to grad school, we will try to help, but they know it is no guarantee.
Find a way to suggest to grandparents that instead of (or in addition to) that cute outfit which will be outgrown, or the fun toy that will fail to hold interest after the first week, that they put the money into a 529 plan.
When our child was in the second grade, our state had a prepaid college tuition plan. We had saved enough to pay outright for a 4-year public school prepaid tuition plan by that time, so we purchased that plan. My child was growing up believing that he would attend our state’s public college. (Never would we know at that time that we would be full pay parents (the last 2 years with generous FA though) for his $$$ private college in the end.)
To illustrate our relatively frugal life style in our early years, we had almost never gone to a restaurant that is more expensive than the fast food chains like McDonald’s, Burger Kings, etc., in our “early” years.
Three years before our child was born, our family likely had only $2000 dollars in our bank accounts after I had purchased our first used car before my first job. Half a year later, we did purchase our second, very cheap used car (it was the infamous Chevy Vega!) so that my wife would not be stuck at the apartment all day long. I think my first year salary was either $34’000 or $35’000 a year, but in a high cost of living area. (I think a 4-bedroom house in a not very good school district would cost about $190’000 about that time. Of course, we could not afford to buy a house. It took us almost 10 years before we finally bought our first house - in a much lower COL state.)
We were at KFC today and we were talking about our early years when we even would not be willing to eat at KFC (its fried chicken is more “expensive” than burgers in our opinion in the early years.) We are no longer as frugal now. After all, we have paid our last tuition bill (not only UG but also partly for grad school.)
Didnt save for our kids’ college education. Both of our kids got 1/2 tuition scholarships and we paid the rest out of current income. I realize that we were fortunate but it can be done. Basically, we live off of H’s income and use mine for college expenses. When the youngest graduates, it will be like getting a raise.
oh and the oldest is getting a fully funded PhD. Hurray!
