Saving Advice for Parent of Young Child

Parents Forum
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<p>In a completely different direction… My advice is to do everything in your power to make sure your kids 1) enjoy academics 2) excel in school 3) participate in EC’s and 4) cultivate self-discipline and responsibility. These qualities are ultimate money-makers.</p>

<p>Our son got thru college on the cheap by having lots of AP classes going in, and getting merit scholarship money. Then he had great internships all thru college that paid for all his living expenses. I know we lucked out big time, but to some degree how we raised him contributed to this outcome. He didn’t have hand-held electronics or was allowed to watch more than about an hour of TV a week. He had real responsibilities around the house from the time he was 5 or 6. We went to science museums all the time. And so on. The parenting decisions you make every day will one day add up to the finished product!</p>

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<p>Here’s a link about the tax break on savings bonds for higher ed, including income ceiling and the need to put the bonds in the parents’ name, not the kid’s name. This is not the Treasury or IRS website – better to check there, really.</p>

<p>[Using</a> Savings Bonds Tax Free for Higher Education - US Savings Bonds - SavingsBonds.com](<a href=“http://www.savingsbonds.com/bond_basics/education-tax-exclusion-savings-bonds.cfm]Using”>http://www.savingsbonds.com/bond_basics/education-tax-exclusion-savings-bonds.cfm)</p>

<p>The bonds offer more financial flexibility than a 529 in the future, with no tax penalty if you are fortunate enough to get higher ed paid for in some other way (full merit ride?) and not need the money for education. I’m not saying that I bonds alone would be the best college savings portfolio, but any portfolio should have something secure in it, more as the kids age.</p>

<p>We had no cable tv for several years and it was a good thing.</p>

<p>OP, we live in a state where public higher ed is good, but not cheap. Sounds like you’re in the same boat. I agree with your implied assumption that it behooves “older” parents to save as they go, and not leave college to be funded with current income or loans. The way I see it, the baseline education is 4 semesters community college and 4 semesters state college, as a commuter. That’s a degree and an experience - maybe not the dream for everybody, but it has worked wonders for many, and improved many lives.</p>

<p>In our state, that costs $40,000 total in tuition and fees ($5K per year at the CC and $15K per year at the state college). Putting a kid in a used car, in a high-insurance state, so that they can commute to these schools, is about another $5K a year. So the total baseline bill is $60,000. Maybe the basic goal is to be on track to do that much. Then, when the time comes, there are ways to upgrade the education – maybe there will be higher parental income than expected, or merit aid, athletic aid, need-based aid from a generous school (you are not poor, but your D would probably still qualify for lots of money at the top schools), the kid working some, or the kid deciding to borrow.</p>

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<p>I know this suggestion might be a bit ‘out there’ but my sister has fallen into a great situation. She got a job a couple of years ago at a college in her town and one of the perks is free tuition for her kids at that college and greatly reduced tuition at lots of other colleges. I believe this is a common perk associated with working in higher ed. Apparently, it doesn’t matter what your job is–custodial, secretarial, admin, faculty. Just a thought.</p>

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<p>We also found a prepaid plan for college was the way to go and the recommendation to encourage your child to love learning and to prepare her for APs and scholarship money is important. </p>

<p>Also, realize that your earnings will probably go up over the years so it is more important to get into the habit of saving consistently even if the numbers don’t quite add up yet. </p>

<p>I had one huge bill I once targeted by putting all ‘found money’ into an account. Found money included refunds/ returns (gifts that didn’t fit), rebates (appliances, etc), gift money, items I sold (garage sale, consignment store), etc. For some people, it includes all change left in their pockets at the end of the day.</p>

<p>Most of my friends who saved substantial money from their budget did so by targeting food. The biggest money saver was people who gardened and canned regularly. After that it was people who planned carefully, often making their menus based on what was on sale that week.</p>

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<p>I don’t want to get into the specifics of someone else’s budget. It is a very personal thing. I only pointed out that $750 is only $15 per week because sometimes it is easy to break things down to smaller increments and see how you could increase things. If you could increase from $15 per week to $25 per week that would be an additional $520 per year. $520 sounds like a lot but it’s only $10 per week.</p>

<p>You can do it!</p>