When did you start saving for your kids

[TheHaitian]

College costs?

Did you follow the YM approved plan by maxing the retirement accounts first?

How much did you put in on a regular? Or was it one time?

[Ombud]

My kids got 12K each + loans bc I was maximizing my 457, paying off debt, putting money into a brokerage account, vacationing

I'm cash flowing GKs college bills outside of his grants, scholarships, FAFSA

[Deleted]

I was a bad YM'er and didn't start until DD was 9.  We were struggling with retirement and paying bills before that. 

[Deleted]

Unless things change with my income, I will never "max" retirement savings, as it would require me putting aside like 60% of gross or something.  Instead I decided that I was putting enough away to be on track and started with the kids savings as soon as they were born.  It isn't much though.  Just $100/month/kid. 

I actually can't put much more in my 401K without causing tax issues.  I was happy that my insurance dropped $900/year and daycare dropped $2500/year.  That's tax-deferred space I can switch to retirement. 

[NomoreDramaQ1015]

With Gwen I started when she was 1.  It's only $25 a month b/c that's all I could put in and still pay other bills.

I haven't started Abby's yet.   We'll be done with DH's student loan in December so I am going to take that and open a 529 for Abby since we won't miss the money.

The plan is once I am done with full time daycare for 9 months out of the year (3 more years to go!) I'll be ramping up our retirement savings and putting more into the 529s.

I do not expect to be able to pay 100% for college, especially if the price tag continues to climb like it has been.  My goal is not to get both kids out 100% debt free but to try to minimize the debt load as much as possible.   I think that is a more realistic goal.

[ArchietheDragon]

You know my answer.   i am not saving for kid's college costs.  I will not until I max out retirement savings first.  I don't plan on maxing retirement anytime soon.    

I feel this gives me the most flexibility in the future. 

[saveinla]

We did not save anything for college - we are cash flowing the full amount of tuition and board supplemented with the small loan that we get from the Gov. We have been maximizing our 401K since 2010, but after that we did not have money for college or that was what we thought.  

I am surprised every month when I pay the tuition and room and board, but we are living really tight now - not tight by YM standard, but by my our standard .

[midjd]

I started DD's 529 the January after she was born (so ~2 mos old), but I didn't contribute much that year because we were still getting used to the $1K/mo daycare expense. Bumped it up from $1K/yr to $2500/yr in 2015 and hope to max it starting next year. Daycare has gone down and our income has increased so it feels much more doable.

I wouldn't prioritize college savings over retirement savings, though -- especially since I know for sure I will retire (unless I am dead), but I don't know for sure that DD will go to college.

[phil5185]

Our first child was born in 1969. That was about 14 years before 401k's/IRAs were commonly available at most companies. And about 26 years before the 529 Plan was created, and 28 years before Roth.

So we invested in a common taxable brokerage account.  We didn't 'compartmentalize', just built wealth for our 'future'.   Later, when the tax deferred accounts became available we maxed a 401k, but all other money was still in the single brokerage account. When the kids went to college, we cash-flowed and/or sold stock.

It actually worked very well for us - sometimes I think that the current generations get wrapped around the axle with the multitude of choices and tax treatments - and almost forget about how to make money.

[midjd]

Nov 16, 2015 15:41:48 GMT -5 alwaysbeoptimizing said:

Max retirement that is tax advantage, then fill their coffers early so it compounds, then back to putting more in brokerage/taxable/early retire/invest fund.

I'm kind of with Phil though. I would be cautious about saving too much in a 529. I invested what should yield 2 years for each kid in there, and the rest is going into my taxable account that I may use to help with college, or early retire, or buy a plane, or?

I am intrigued by your method (and the $14K/kid you invested seems very doable since I only have the one). If your state had offered a tax credit for 529 contributions, would this have made a difference in how you handled it?

My state has a 20% tax credit up to $5K ($1K credit) so I'd be reluctant to contribute more than that in a single calendar year if I knew I would continue making contributions, but I wonder whether maxing it for a few years and dialing back would yield similar results... 

[Ryan]

I started for my oldest when he was just born and I put maybe $25K in at the low point of the 2009 market that eventually grew to around $60K or so.  I then had 2 more kids and switched gears and focused on retirement savings so really didn't save in a 529 for several more years (my oldest is now 7). 

Now I'm back to putting a bit of money into it.  My balances for 3 kids are around $65K.  When I estimate that I'll have around 50%-60% saved for all 3, I'll start just putting away any excess savings into taxable mutual funds instead.  

[giramomma]

The grands are saving for us, both in a 529 and in taxable accounts. If more is needed, I'll have the kids take out loans and delay my retirement...working longer to pay off loans. Worst case is that I retire between 58-60.

We do not maximize our retirement. If we did, we'd have about 20K to live off of for the year. Not happening.

Our kids will not qualify for need based scholarship, and they are average..so I'm really not expecting merit based help at the undergrad level. So, I'm not really concerned about how savings is counted.

[steph08]

I started the moment she was born. I put $75/month into a 529 and will do so for the new kid as well.

Hopefully she ends up around 40-50k in the account when it is time for college, even if we don't increase contributions.

Right now we each save 10% of our salaries into a 403b (me) and pension (DH).

Retirement savings and house payoff will ramp up when daycare stops costing us 25% of our monthly income before we increase 529 contributions.

Hopefully we can cash flow the remainder or at least some to keep her loans minimal.

[Deleted]

We didn't save for our kids' college educations. We went on the premise that they were smart enough to get scholarships.  It actually worked.  My daughter did have to borrow the $17,000 a year for pharmacy school, but that's all.  Her four years would have been covered, but she actually took advantage of being able to apply for admission after just two years of college.  She was accepted. 

I wouldn't advise that plan, though.  Our lack of savings is also one of the reasons why I have been trying to save for my grandchildren's education.  Their parents have the same plan.  Lol.

[quince]

We figure that we don't gain anything from earmarking savings- it won't make us save more. If there is a tax benefit or you wouldn't save the money if not for a purpose, then I suggest saving as soon as they are born. If you would save the money anyway and there is no other benefit for having it be earmarked for your kids....don't, and help them as you want to or are able to with your cash flow/savings at the time.

[gooddecisions]

We've been maxing retirement accounts since before we had kids and have healthy brokerage accounts. I opened 529's for my first in 2011 and second in 2014 as soon as I had SSNs for them, which was when they were about 1 month old. $415.67/month goes to each so $5000/year for each. It's going to be tough when number 3 is here to divert $15000/year on top of the $45,000/year daycare bill.    Now I know why people just have 1 kid.

At this point, I really think cash-flowing college will be a breeze next to cash-flowing daycare. We would be rolling in it if it weren't for funding daycare at $45 grand, retirement at $36 grand and college accounts at $15 grand. 

[siralynn]

So far my two kids (2.5 and 6 months) each have a 529 with an initial deposit of $3k and no additional contributions. Unfortunately my state doesn't offer any tax incentives for contributions.

We are currently maxing retirement accounts, but don't want to tie to much up in 529s because we're in the enviable position of having major grandparent contributions coming. Contributing something like $250/month to each of their six grandkids' 529 plans is a major part of my parents estate planning (they get a healthy tax break from their state).

Our mortgage will be paid off just as my oldest is heading off to college, so optimistically we'll be able to cash flow whatever grandparent savings doesn't cover. We may tuck more in 529s as we get closer and have a more realistic idea of future costs.

[alabamagal]

We did not have any saved when kids started college. Oldest started in 2008 third is still in with 1 1/2 more year.

We paid for private k-12 so we're able to put that money towards college expenses. All kids were good ( not great) students and were able to take advantage of full tuition scholarships at state schools, two in Georgia and one in Alabama (even though we were in GA at the time). They also took out max federal loans and have not had issues with payments.

[MarleyKeezy78]

We opened a 529 for DS a couple years ago (he is six) We put $50 a month in it right now. We also did a different kind of life insurance policy for him when we got ours, it gets paid yearly and builds wealth he can use when he is older. We also opened a joint savings account for him and he puts most of his birthday, christmas, rolled change or whatever money in there. He is quite the saver and has over $800 at the moment, I am proud of his saver ways   He's better at it than me 

[Artemis Windsong]

I put money aside every month when I started working.  It was earmarked for them.

[teen persuasion]

We have prioritized retirement savings over college savings.  I looked into 529s, but they made little sense for us - the state tax break is minimal since we are low income, and having 529 assets would be counterproductive for our FAFSA.  I've made sure I understand the FAFSA formulas inside and out, and for us funding retirement accounts was best.  The kids have done well so far with scholarships, grants, work study, and loans. They've chosen in state schools, so they are close enough to keep transportation costs down, and keep eligibility for TAP in addition to PELL.  

DD1 and DS2 are thru, DD3 is in her third year, DS4 is gearing up now to start next fall.  DS5 will be the tricky one - he is far enough in age from the rest to essentially be an only child on the FAFSA, a whole new ballgame for my machinations.  Things keep changing (like the move to apply in October with prior-prior year taxes, and shrinking asset protection charts), so I'm watching and waiting and running calculations.

[thyme4change]

I am suppose to be saving for the kids?  

[yogiii]

We started each kid with a lump sum (though not as big as alwaysbeoptimizing) but nothing after that, unless they get Christmas money or something like that which is stated to be directed towards college.  I went back and forth on this a lot last year and ultimately decided to save in taxable/pay off my mortgage early.  My oldest goes to college in 12 years and I currently have a little over 9 years left on the mortgage, so even if I don't pay down any more, I'm good there.

[Regis]

Started saving when they were born.  Have been able to pay for all four years of undergrad for each of the three.  Youngest son and daughter will both have small amounts of money left over to use for grad school.

We made monthly deposits into each of the three 529 plans.  I also had a spreadsheet that computed how much was required each month to keep each of the accounts on track.  By skill or dumb luck, it has worked out almost perfectly.

[973beachbum]

We saved what I thought at the time was a decent amount of money for DD's college.  She is almost 8 years older than DS so when we started he wasn't even born.  I will say that we made dog doo doo next to most here except for the last few years.  So our savings totaled just under $10K for DD, not in a 529 though.  My state didn't have much tax advantage to them so it was just in a taxable account. 

When we started it I thought it was a good amount considering how much we made.  When DD actually started looking at colleges though.

I will say that DD got some really decent merit aid from private schools.  Enough that her private college costs less than the cheapest in state school.  So don't discount the possibility of merit aid even if your state doesn't have a program set up to give aid to students regardless of family income.

It is mildly annoying that as soon as DD gets close to going to college we start making good money and things like the FASFA make it seem like we are rich when we only just started making close to that kind of money.

[princessleia]

Like Phil, we did not compartmentalize but just simply build wealth for the future. However, the one investment which turns out to be the main 'fund' for the kids' college education was started like 5 years before our first child was born. And no, we did not follow the YM approved plan of maxing retirement accounts first. In fact, I stopped all voluntary contributions quite sometime back going only by the compulsory contributions to the pension plan. Come 15-20 years later, it would be interesting to see how our retirement pans out. 

[cronewitch]

I only had one child I might want to help with college a great nephew, if he didn't go I wasn't going to offer any money. I considered 529 but if I didn't spend it on him I would pay a penalty and didn't have another kid to switch it to. So I maxed retirement and saved in taxable investments and inherited money so now when he is in college I can gift him whatever I want so far 17K in the first two years, he got free AA in community college but still will take him 3-3.5 years so maybe two more gifts if I feel like it.

[skubikky]

Used UGMA accounts and funded them with gifts and our own contributions.
DS had more than DD for various reasons.
Both took subsidized Federal loans.

DD finished college in  3 years as she was able to take 27 college credits during high school at the local SUNY.
She was able to move off campus after the first year and her rent was about $200/month.
She worked and paid most of her living expenses.
Her living situation helped tremendously in keeping costs down.

DS took longer than the 4 years.  He worked to pay part of the costs and lived home for a portion of his time in school.
When the investments in his UGMA account were exhausted, we cash flowed.

Both have manageable student loan amounts and are doing fine.

[MJ2.0]

Nov 16, 2015 23:28:12 GMT -5 thyme4change said:

I am suppose to be saving for the kids?  

That was my thought too!

Actually I have to as per the divorce decree. I find it ridiculous that if we stayed together we could kick DS out at 18 and not give him a penny toward college, but being divorced we have to each kick in (estimated) 25% of college costs.

[MJ2.0]

I guess I should open a 529 or UGMA or something before year's end. He's 4.