swamp
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Post by swamp on Feb 16, 2011 10:13:31 GMT -5
I haven't to that magnitude, but my kids are little, so I still could do something like that. I hope not, but you never know.
I commend you for recognizing your mistake and doing what is necessary to fix it. I'd karma you, but I'm all out right now........
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gooddecisions
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Post by gooddecisions on Feb 16, 2011 10:26:23 GMT -5
"combination of this year's tax return and monthly payments starting in July -- we're going to forgo saving for retirement for the next 5 years or so"
Daphne, would you be willing to post your budget? Is your husband receiving social security disability for his mental health or could he if he's not already? Are there other ways you can increase income and reduce expenses?
If you do indeed have a 300,000 lien free home and 70k family income, I really think there should be a way to improve your situation without having to forgo saving for retirement.
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gs11rmb
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Post by gs11rmb on Feb 16, 2011 10:28:14 GMT -5
It is good you recognized your mistake but perhaps forgoing retirement savings is not the best idea. You don't want to pay back your daughter's college fund only to become dependent on her for financial support when you retire.
Also, can't you take out a home equity loan for the college fund and pay it off over many years? It doesn't sound as if you are the type to accrue consumer debt.
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Clever Username
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Post by Clever Username on Feb 16, 2011 10:38:39 GMT -5
Notice the trend here, I'm not basing this off of much information, but it's a possibility in your life.
You've got a myopic view on problem solving. You're a fan of punting. You rob Peter to pay Paul.
Without any specifics, forgoing retirement savings for an extended period of time sounds like it is going to make your overall finances worse.
I think you should recognize here that the problem was likely not shorting your dd, it was not having a long term financial plan which included whatever's going on with DD. Solving that problem would be to create a long term financial plan which includes whatever's going on with dd.
Methinks you are making the same mistake again.
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Politically_Incorrect12
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Post by Politically_Incorrect12 on Feb 16, 2011 10:39:12 GMT -5
There are different schools of thought on this subject. Many say don't not save for retirement to fund a kid's college fund since they won't be paying for your retirement, and you can always pay off their college loans with the money you save in the future if that is your choice.
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swamp
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Post by swamp on Feb 16, 2011 10:42:29 GMT -5
There are different schools of thought on this subject. Many say don't not save for retirement to fund a kid's college fund since they won't be paying for your retirement, and you can always pay off their college loans with the money you save in the future if that is your choice. But on the prior thread, she explained she broke a promise to her daughter about college money. This is about repairing her relationship with her daughter, which is more important than saving for retirement right now.
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happyscooter
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Post by happyscooter on Feb 16, 2011 10:51:25 GMT -5
May I ask a few questions? I am not judging. And I have never been in your shoes. Both of my children are out of college. Why did your DD decide to live with dad? Did he promise her anything? New car, new cell phone, no curfew? Why did she go live with him? Is he urging her to apply to the private colleges? I do know of parents who tried to stick it to their EX by putting the kids in private schools so the EX would have to pay. Nevermind that it had not been discussed while they were married or the child didn't want to go to private school (elementary). It was just another way to get money. State colleges can be doable, living on campus or not. No loans if both parents chip in and the student works. Yes, it can be done. We had always told our children that we would pay for school. But had they turned into 'professional students' or they didn't want to work and contribute or they wanted private universities, that was a different story.
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happyscooter
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Post by happyscooter on Feb 16, 2011 11:03:55 GMT -5
Both of my sons had friends who wanted to go to private colleges. Even when they knew how much it costs. Until mom and dad said we will pay $10k which is what state universities are here. And that is dorm, food, tuition, etc... Then the kids said 'oh you know what? State U is really a good school after all.'
That's what I hope isn't happening with you.
Good luck. Parenting-it's the best job in the world and the worst job in the world.
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whoisjohngalt
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Post by whoisjohngalt on Feb 16, 2011 11:14:14 GMT -5
I hope you never convey that message to HER. Even though I haven't raised any DDs, I can not imagine a girl at 12, 13, 14, 15 or 16 not needing her mother. She might not say it or even say the opposite, but I think every girl at that age needs her mother.
Good luck to you!
Lena
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phil5185
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Post by phil5185 on Feb 16, 2011 11:17:21 GMT -5
we're going to forgo saving for retirement for the next 5 years or so). Sounds like a worse mistake than the first mistake? I would definitely use student loans for DD's college and fully fund your retirement. SLs are easy to get - and are desirable low rate, long term loans. But retirement loans are impossible, lenders cannot make loans to retired (elderly & out of work) people who run out of money for the obvious reason - they have no means to repay it.
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souldoubt
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Post by souldoubt on Feb 16, 2011 11:19:35 GMT -5
Paying for her school now isn't the only way to repair the relationship, doesn't guarantee it will and it's kind of just throwing money at the problem. Even if you repair that relationship when DD has a family of her own do you think she'll look at it the same way and help support mom if she needs help in her later years because she didn't put enough away for retirement? I think Clever Username nailed it and I wouldn't be robbing Peter to pay Paul.
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souldoubt
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Post by souldoubt on Feb 16, 2011 11:28:20 GMT -5
I don't see how it's the best compromise for the time being. I never took out student loans so correct me if I'm wrong but don't interest and payments start up after graduating? Why not put away whatever you can for DD in a separate account while she's at school after making sure you stay afloat, contribute to your retirement plans, etc and then give her what you put away when she graduates in 4-5 years?
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Deleted
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Post by Deleted on Feb 16, 2011 11:43:20 GMT -5
"If you do indeed have a 300,000 lien free home and 70k family income, I really think there should be a way to improve your situation without having to forgo saving for retirement. Read more: notmsnmoney.proboards.com/index.cgi?board=finance&action=display&thread=3481#ixzz1E8lrzI84" I am really stuck on this point as well. You still make a good living. You have no mortgage. Even with the child support payment, you should have a lot of extra money. Is it just that it fluctuates and you plan for the lower months? I am getting the impression that DH had the more 9-5 job and you lived off of his income which was easier to budget. Now you are living off of your income, which fluctuates. I wouldn't forgo retirement savings, unless you already have a good bit stashed away. I think your mistake was focusing so intently on being mortgage free that you forewent other goals. Now it looks like you are myopically focusing on college savings. Retirement savings needs to be started as early as possible. You should check out some calculators that show your retirement position, if you forgo retirement savings for 5 years.
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Deleted
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Post by Deleted on Feb 16, 2011 11:43:48 GMT -5
Add to that the fact that I spent her college fund on my house ... well, you can see I'm not going to win any mother of the year awards. She never had a college fund. YOU had a savings account with the intention of helping her with college. The money never was hers.
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Plain Old Petunia
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Post by Plain Old Petunia on Feb 16, 2011 11:55:32 GMT -5
(And a mortgage is out of the question for the time being. However, a possibility next year when things calm down.) Daphne, if you want to "repay" your DD the 40k, you absolutely can. You don't have to come up with it this minute. DD hasn't even started college yet. You don't have to have the 40k the moment her first class begins. Once the CS is done, you could start saving up. A mortgage or HELOC may be out of the question right now, but you have time between now and DD's graduation to work that out. If nothing else, DD could take loans and you could pay off 40k worth in one fell swoop. Her payments don't begin until 6 months after graduation, so you have 5 years to come up with the 40k. That's $667 per month. If you save that up, you don't need a mortgage or HELOC, you will have the 40k. You are paying $1100 per month CS now. Once that ends, if you save $667 per month for DD, you still have $433 per month to save towards retirement.
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Clever Username
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Post by Clever Username on Feb 16, 2011 12:17:53 GMT -5
Is this too simple: $1100 / month child support ends at HS graduation. $833 / month college contribution ($833 x 48 months = $40,000).
But really, you need to do a retirement assessment to figure out if you have assets enough to afford a five figure gift.
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973beachbum
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Post by 973beachbum on Feb 16, 2011 12:34:22 GMT -5
Add to that the fact that I spent her college fund on my house ... well, you can see I'm not going to win any mother of the year awards. Her worst case scenario school is a state university and she doesn't have a problem with that. She'd just love to go to X or Y private school, but the money will be the deciding factor. Since the difference between state and private is $30,000 a year, I am hoping my screw up won't be too much of a factor. I'm working on my relationship with DD. And being an adult and loving her regardless of what I did, she did or her dad did. All that matters is that I love her and want her in my life. And I will spend the rest of my life proving that to her. Daphne, one thing still bothers me about this. Your original savings for DD's college was 40K total. Yet she is looking at schools that are 30K a year. Even if you get the whole 40K in one lump where's the other $80K going to come from? I also would strongly advise you, even in a perfect world, to give her the money on a per semester basis. I would never let her use it all for one year. To me this would not solve the problem with the cost of the school that she can't afford, just kick the can down the road. IMO students need to deal with the reality of what they can or can not afford in colleges up front, and plan with that in mind.
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973beachbum
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Post by 973beachbum on Feb 16, 2011 12:47:35 GMT -5
97 -- good point. And giving it to her per semester also means I can't spend it before September comes around. (Again....) She's actually looking at two state schools for $20,000 a year and two private school at $50,000 a year. (The difference being $30,000, hence why my "spending" her college fund might not be the deciding factor between the schools). Her dad's parents have some money put aside for her to go to college, and her dad makes a lot, so I'm assuming that's where the rest will come from. She's hoping for some merit-based aid from the schools, too. (She's pretty darn bright.) Daphne my DH teaches part time at a local college. The $50K a year is a clue to me what colleges she is thinking of and those colleges normally don't give any merit based scolarships unless a student also has financial need. They base it on the custodial parents income but some add in the noncustodial's also. I can't see a way that they would consider the Dad's income of $120K a year to be in financial need. I am not saying that a Notre Dame (or a similar Univ) education isn't a grand thing but she really needs to know up front how much it is really going to cost her for years to come. The next tier down of colleges just might offer some merit aid. I am not saying this to bust her bubble but this is one case that I think she needs as much info as possible.
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973beachbum
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Post by 973beachbum on Feb 16, 2011 12:53:00 GMT -5
One other thing. I was thinking more along the lines of she gets into the dream college that just happens to cost $50K a year. So she uses the $40K from you and a gift from the grandparents plus some from dad and she has her freshman year paid. Then what happens after that?
This a very tough situation for a kid to be in but it is even tougher for them to be in it after a year at a school that they love and have spent their entire college fund on. IMO that is where those people who have $120K in student loans from a batchelor's degree get into that mess from.
Just my 2 cents.
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Deleted
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Post by Deleted on Feb 16, 2011 13:04:33 GMT -5
Daphne, my daughter also left home her senior year in high school. It's a long story. I advise you to continue to be honest with yourself about whatever mistakes you made, learn from them and work to fix whatever is fixable. Anybody that tells you they never made a mistake as a parent.......... is LYING!
My daughter was never really interested in school, she failed several classes throughout high school and barely graduated. She's a freshman in college now at a private college that I advised against because of the cost. Our agreement is that she had to get loans. I bought her books, miscellaneous items and give her spending money. If she doesn't make the grades, I'm done.
The other part of the agreement is that IF she graduates, I will help her pay her loans back. If she doesn't finish, the loans are hers alone. I couldn't afford the full tuition at the college she chose, even if I wanted to, so she'll have to get loans as long as she's there.
It's a different situation than yours, but my point is that you can still be supportive of your DD and help her with college without trying to come up with the entire 40k immediately. Figure out what you CAN do (and be realistic about it), sit her down and be very clear with her about what she can expect from you, and follow through.
Good luck!
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Deleted
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Post by Deleted on Feb 16, 2011 13:15:52 GMT -5
As for the OP......... I didn't make any one HUGE financial mistake. But I made enough mistakes that lumped together, eventually landed me in a HUGE mess.
The only thing I didn't screw up in one way or another was my house. My house was affordable when I bought it and as my salary has gone up, the payment, taxes and insurance are all around 15% of my pay. When everybody was pulling cash out of their homes, I was too afraid to take the risk. So when all the shit hit the fan, at least I didn't have to worry about losing my house too.
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cronewitch
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Post by cronewitch on Feb 16, 2011 17:51:06 GMT -5
I love my daughter. And I am fixing my own mess. Read more: notmsnmoney.proboards.com/index.cgi?board=finance&action=display&thread=3481&page=2#ixzz1EAGiGyA9The rest is just details, let her know you love her and will do the best you know how to show it. My brother has an oldest daughter that hated her mother, her mother was stupid and made stupid rules, they couldn't get along at all. She went to live with my brother and his new wife and new children a couple of years. She returned to her mother for her senior year but her mother didn't let her stay past the end of high school except one year when she had no place to live her mother let her live in the basement. She wasn't allowed to eat with the family and had to pay rent. Now the girl is 41 and gets along great with her mom. The girl needed to be shoved kicking and screaming from the nest. She lived with my parents until they kicked her out, lived with her sister until her sister kicked her out. Married the first boy who wanted to get married has 2 kids and 3 foster kids now and is adopting two of the fosters. She will not work and even now her husband is the one to do most of the childcare. But she visits her mom and stepdad all the time, her kids love it at grandma's house.
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Post by debtheaven on Feb 16, 2011 19:12:31 GMT -5
Kudos (and karma!) to you for your grace and good will! As others have said, you don't need to come up with all that money at the same time. I would aim to come up 75% by the time she finishes college (in five years!) and to plan to help her with the other 25% afterwards.
But, I do think you need to work on your DH. I'm very sorry he is waking up anxious in fear of losing the house, but, frankly, that is CLEARLY NOT a realistic fear. You are visibly much kinder than I am, and I'm pretty kind.
I do realize that your DH is very anxious but as another person in a second marriage, my DH would not have lasted for very long if he consistently needed to take priority over my/our kids. I probably would have been very sorely tempted to put him out of my (his) misery myself.
But now that your DD is physically out of your house, it should be easier to "put her first" with at least your free time, if not your money.
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Post by bobbysgirl on Feb 16, 2011 20:39:42 GMT -5
Do all YMers pay for their kids' college? Were we bad parents who paid only for certain things (books, clothes, food) and our kids paid for the rest?
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Post by gsbrq on Feb 16, 2011 23:29:08 GMT -5
Kudos to you; it takes courage to own up to your mistakes & to go about making amends. Good luck!
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phil5185
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Post by phil5185 on Feb 19, 2011 13:51:37 GMT -5
So the build cost us $290,000, but we only had $250,000. To make up the difference, we use DD’s college fund which we’ve been contributing to all these years (we had saved exactly $40,000). Looking back over your posts, I'm wondering if you recognize your primary mistake - ie, putting the entire $250k family wealth in house equity instead of using a mortgage? I say that because you often say that you feel terrible about taking the $40,000 fund but you didn't mention the $250,000. You mention irrational fears - 'fear that we won't have $1.4M for nursing homes' - 'no one can ever take our house away from us" - 'a special $6000 property tax fund' - 'a special house maintenance fund on a new house'. Did these fears cause you to stick $250,000 into house equity rather that get a home mortgage? Or keep you from getting a mortgage now?
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wvugurl26
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Post by wvugurl26 on Feb 19, 2011 14:05:31 GMT -5
Based on what I've read her husband is the one with problems with a mortgage or HELOC. If spending the money has damaged her relationship with her DD that badly, I would think taking a $40k HELOC would be the answer. To which the answer is her DH won't do it. I get that some people aren't comfortable using their house as an ATM but $40k loan on $290k house doesn't seem reckless or irresponsible. DD may need to take out student loans and maybe later mom will be in a position to help her pay them off. I think they lowered the rate for undergrad loans to 5.8%. Cheaper than 20% CCs but not the 2-3% a lot of people here have. Some of DD's behavior is probably that of a bratty teenager but I understand her side. Nothing burns me up more or has damaged my relationship with my mother more than her not doing things she promised to me. Don't make promises you can't live up to.
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Post by robbase on Feb 20, 2011 13:43:38 GMT -5
I guess I was required to read another thread to understand this one?
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TrixAre4Kids
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Post by TrixAre4Kids on Feb 21, 2011 0:06:45 GMT -5
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happyscooter
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Post by happyscooter on Feb 21, 2011 7:30:11 GMT -5
I still wonder what the daughter would have done if mom had never saved any money. Not gone to college? Community College? What? And now that mom isn't paying 40k for 1 year and might help pay 40k spread out, do the state universities suddenly look 'enticing?'
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