anyone good with money? (college savings)

I'm with Fidelity as well for my 401K...

Mike - it's never too soon.. once you get up in the years, it's amazing how fast the money can grow in just a year. I shot myself in the foot waiting until I was 30 to start my 401k.. it cost me an estimate of $1 mil by waiting 5 years to start (retiring at age 65)

If you can do 231 a month, at a 6% return, you'll have right at $90k saved his freshman year... mind you, the balance will still earn, since he will only take a piece of that every semester.

150 a month will get ya $58k...
http://www.dinkytown.net/java/CompoundSavings.html
 
Put a baseball bat in his hands now...spend cash for private lessons, be it batting, pitching, or fielding....not only will he pay for his own college, but he'll have plenty of meaningless relationships with fine, young women while he's there, just because he's an athlete.The beauty of this plan comes if he's good enough to support you in your old age. I'm with GE capital, have been for years, if you decide to go the standard route.
 
Mike - I mentioned this to Nicole - She was rather adamant (sp?) that you not do what I suggested.. Instead, open the account in a trusted family member's name.

Reason why - When Ryan goes to apply for financial aid of ANY kind, they will take whatever balance he has in the savings account right off the top of any eligability. If it's in, say, Brandi's sister's name, it won't be seen.

And who am I to doubt her - she'll be getting out of school after gawd, what.. 10 years of college? with less than 12k in bills, thanks to alot of grants, student aid, etc...

Greg's idea is right on too - 'cause with the genes he's got, he certainly won't be a basketball player! :flipoff2:
 
We've been advised, and are looking at the numbers now, not to claim our daughter on our income tax her senoir year. That way they don't take into account what we make when it comes to grants.
 
Rich said:
Mike - I mentioned this to Nicole - She was rather adamant (sp?) that you not do what I suggested.. Instead, open the account in a trusted family member's name.

Reason why - When Ryan goes to apply for financial aid of ANY kind, they will take whatever balance he has in the savings account right off the top of any eligability. If it's in, say, Brandi's sister's name, it won't be seen.

And who am I to doubt her - she'll be getting out of school after gawd, what.. 10 years of college? with less than 12k in bills, thanks to alot of grants, student aid, etc...

Greg's idea is right on too - 'cause with the genes he's got, he certainly won't be a basketball player! :flipoff2:
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I have to disagree with Rich here. As far as governemnet grants goes, it is unethical IMO to curtail or hide money that should be used to qualify. I think government hand outs should be reserved for those with out the ability to pay. If you have the means, intelligence and foresight to save money today for an event nearly 20 years in the future you do not need, are not entitled to, nor sshould expect a government hand out. Your reward will be many times greater as will your satisfaction knowing you have cared for your own.
This is a personal and moral choice however do as you like but no self respecting ethical financial advisor will advise you pigeon holee money to prevent it from affecting your govt income status...

To answer your question look into the so called Education IRA ?529b?
(The numbers all run together here...)
There are a number of allownaces that permit you to save, invest, grow and use money tax free (not deferred) and they are usually more advantageous than a standard IRA... I can get the plan names when I get home if you are interested.
 
Unethical? Sure, might be. Let's just say the kid does really well in H.S. and gets a 1450 on his SAT, and is valedictorian of his class. Should the kid be denied college scholarships because his parents have a decent job and have sacrificed, and also tell him that he busted his ass for nothing?

What if he's accepted into Princeton? That money Mike & Brandi saved won't cover that.. and should he be denied because he has money for some of it?

I'm not talking just gov't money.. Many private funds look at this too.

Granted, Nicole's parents could not afford to send her to where she went to school, and many of her grants were awarded even after the inclusion of her parents salaries, however, there were some that had a ridiculously low asset cap of like $35k.

I don't feel it's ethical to penalize people who bust their asses and are trying to do the right thing by saving some money by not allowing them to be eligable for grants and scholarships.

Maybe Mike should quit his job 18 years from now, so that Ryan can live off the gov't teet like pre-Katrina New Orleans.

My opinion: If you the student has earned the scholarship through your hard work, good grades, accomplishments, and test scores, then you should be eligable for the rewards, whether your father is wealthy or dirt poor. I guess that's borderline political, since my views obviously skew to the right.
 
If you are gonna save up for your child's education you had better save up more than that. I read somewhere baised on inflation rates and the rising of college tuition now, that in 18 yrs. you'd need well over 100,000 for public in-state tuition. Now this seems like a large figure. But look just a few years ago at the price of tuition, nothing compaired to today. Each year they jack up what we have to pay for books, r&b, meal plan, tuition, etc. etc. etc. Now, I am not saying that the 100,000 figure is accurate but I feel college is gonna be getting more and more expensive in the years to come. So if you base your saings plan on todays rates (approx 14,000 for instate public) then you might come up short.
Yeah, if the youngin' is a smart one he might rack up some scholarships, but the full rides are very few and far between and hard to come by. So to achieve the excellence needed you, as a parent, will need to be dedicated from day one and help Ryan, keep him motivated and enthusiastic about his work and he will thank you for it forever.
I hope it all works out for you guys in the end. And, I hope when I have to start saving for a little one, college is not gonna require me to sell half my organs. ;) :D
 
ShyHiK5 said:
I have to disagree with Rich here. As far as governemnet grants goes, it is unethical IMO to curtail or hide money that should be used to qualify. I think government hand outs should be reserved for those with out the ability to pay. If you have the means, intelligence and foresight to save money today for an event nearly 20 years in the future you do not need, are not entitled to, nor sshould expect a government hand out. Your reward will be many times greater as will your satisfaction knowing you have cared for your own.
This is a personal and moral choice however do as you like but no self respecting ethical financial advisor will advise you pigeon holee money to prevent it from affecting your govt income status...

To answer your question look into the so called Education IRA ?529b?
(The numbers all run together here...)
There are a number of allownaces that permit you to save, invest, grow and use money tax free (not deferred) and they are usually more advantageous than a standard IRA... I can get the plan names when I get home if you are interested.
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Unethical? Tell me, why is it ethical when a child turns 18, to use their parents money to qaulify them for grants and loans. That's their money, not the kids, at 18, they are a legal adult, and have very little income at that time. The parent is not legally responsible at this point so why should they be held financially responsible. At the point they turn a legal adult, the parents income should be null and void, no matter if the parent is helping or not. Also, I thought scholerships were based on grades and hard work, not income. Grants are based on income.

FYI, I am helping with my childrens college, but I refuse to pay for it all, they have to work for some of it theirselves. IMO, they will value it more if they have an investment into it.
 
Yea see, that is exactly what happened to me. I got a 4.25 in high School, was an Eagle Scout, Captain of the Football team, etc. And I got awarded a Scholarship at NC state based my good grades and leadership. Then I get here and they all of a sudden inform us that since my dad has $ they will not pay out my scholarship. We were sooo pissed, how is it fair that i worked hard to get a schoarship and get denied cause my dad has some $? Not only that but my dad is only gonna pay for half of my college so that means that I had to get two different student loans to stay in college, thats a s***load of $$$ i'm gonna be in debt when I get out just because some asses think my dad has too much money so I don't deserve the scholarship that i worked so hard for :mad: .
 
Rich said:
I guess that's borderline political, since my views obviously skew to the right.
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Yeah, but what you're advocating isn't a "right" view.... it's a "left" view.
 
Putting people on a level playing field based solely on their performance, with no bonus or penalty for being rich, poor, majority, or minority? I don't think that's very left at all.

I dunno, might be. Seems that most "independents" I know are really democrats who won't admit it.. :p

I was obviously joking about Mike quitting and living off the gov't..
 
Some scholarships are need/performance based. For example. I got a James M. Johnston scholarship which was given to me because of my good grades and sat etc. But it was also on my financial situation. I had shown that there was a difference between my familiy's total assesed contribution and what it would be to go to state. The scholarship met the difference. When i got others, they reduced my scholarship because they saw that need was being met by other sources. Even though I got scholarships, I had no where near enough to meet the total cost. Yet they still reduced my amount because they saw the family as being able to contribute via loan assets etc. So when you apply to school you will have to fill out a FASFA (I think is the abbrev. for the gov't fom) which identifies your family contribution. You have to do this before you can get any loans, scholarships from the school, etc. This includes what the parent's are financially able to support and what the student can contribute. So they take this FASFA rating and apply that to what your grant values will be and how much of what type of loan you will qualify for... Kinda confusing? Yes.. Maybe there will be a better system in 18 yrs...
 
Well I'm baised here since at the time I was in high school my parents didnt have enough to send me to college.. and quite frankly I was sick of school anyway. I had be offered scholarships to Temple Univ and Valley Forge Univ (Im from Eastern PA) BUt long before my senior yr i decided on the military. Now I am working on my degree.. and not paying a cent for it. I say.. invest the $200 a month.. and sent your kids into the military and take your saving and buy a really big motorhome and see the country!
 
Unless you want to constantly monitor your investment, use a fund that basicly mirrors the S&P.

As far as the ethecial concerns. When the govt stops wasting my hard earned money I will quit trying to screw them out of every nickel I can.
 
Advice from WildChild, who has more merit badges in the field than most and is paying the tuition of 7 honor students whose parents "make too much money" as well as giving free student apartment space to several scholarship students with a GPA over 3.5 is:

1) Go to your bank and ask for a financial planner, not some "personal banker" flunkie, and have them show you what they have for accomplishing what you want to do. You already have a mortgage with them probably, so they will most likely be willing to work with you more so than someone with a $100 checking account. They have college funding plans as part of their portfolios that will also include advice on tax situations and income disposition changes. Remember, as long as you have a mortgage and are a depositer, they have an interest in keeping you happy, and most of all, it should be free.....sorta. You're paying for it through letting them use your money.

2) Go to the college fund sites on the internet and see what is currently available loan, grant, and scholarship and fellowshipwise. As you scope the sites, see if there's an organization like the College Fund of NC and go to that site for info. There may be a College Fund of Ohio. There will be someone listed whom you can contact for financial advice.

3) Pick some colleges you feel might be a good shot for him and go to their websites and see what their "blind acceptance" policies are and what financial aid resources they list as potential funds. They will have info available to steer you toward a solution that fits your situation.

Take all that info and study it until you've satisfied yourself that you've learned as much as you can. Since it's likely that you'll have to use a combo of financial sources, it's these three sources that can give you a better insight into what options you have and advice towards what's best for your given situation.

It's all gonna be confusing at first, but with some study and some help from the sources you choose, you can make a realistic decision for yourselves. The more you know going into a financial planning session, the more you'll know whether the advice is good or not, and whether it benefits your sources more than it benefits your goals.

Don't lose site of the fact that what sometimes seems less than desirable on the surface and in the short run may be a good thing in the long run. Nobody is the whole source on this or any other subject, but those who have the most to gain from keeping you in good shape, and those organizations that don't seek a profit from helping clients are the best sources of information. Congratulations on making a committment.

Good luck!
 
Rich said:
Putting people on a level playing field based solely on their performance, with no bonus or penalty for being rich, poor, majority, or minority? I don't think that's very left at all.
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You're not talking about putting people on a level playing field. You're talking about defrauding the government or a private organization out of something that you wouldn't otherwise be entitled to. You're talking about cheating the level playing field. While cheating, in and of itself, is neither a leftist or rightist view, the idea that you're owed something by those wealthier than you is a far left view. See also: communism, socialism, The New Deal, etc.
 
most of the time the question is 'CAN someone claim you on thier taxes' not IF they do. I lived on my own for a most of my college years even if in a dumpy appartment. And because I was still needed health insurance needed to maintain my 'home address' etc..

Honestly my folks didn't understand what college was going to do for me... Until i made more my second year working than he did when he retired after 30 year delivering packages...

Here is what I would do... Save money anyway you find that works.. Kick your child out at 18 send them off to school. Give them generouse hands out when needed. Provide car, books etc.. Let their own financial situation take them where it may. And simply kick in the rest out of the college till..

Maybe somthign like this, Pay off the house early, save/invest when thats done, remorgatge the house when the time comes, or rates are faverable. Use that money for cash hand outs to son.. :)
 
What kind of message does it send to your child if you hide money in order to get more from the government in need-based loans? That is the equivalent of lying about a work-related injury to collect disability. The system isn't perfect... NCSU screwed around with me over potential merit-based scholarships and pissed off my whole family of alumni. There was so much more money out there I could've won if I had only known about it... there are tons of scholarships related to trade and business organizations, alumni groups, church groups... If you're smart enough to save and plan ahead, then you can find a way to find that money, without cheating anyone.

Rob said:
Tell me, why is it ethical when a child turns 18, to use their parents money to qaulify them for grants and loans. That's their money, not the kids, at 18, they are a legal adult, and have very little income at that time. The parent is not legally responsible at this point so why should they be held financially responsible. At the point they turn a legal adult, the parents income should be null and void, no matter if the parent is helping or not.
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So, if the kid is still 17 when he applies to college, does that mean the government has every right to consider the parents' income, but not so if his birthday was 1 month earlier? If you still claim him on your taxes (Rob, I know you said you won't do this), which you can until he's 25 if he's in school, then your income is part of his potential to afford college. Like Yager mentioned, there are lots of reasons for parents to continue supporting (and claiming as dependents) their over-18 children through college.

Rob said:
FYI, I am helping with my childrens college, but I refuse to pay for it all, they have to work for some of it theirselves. IMO, they will value it more if they have an investment into it.
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My parents helped me some, mostly with college assistance money they get for working at Duke, but I earned academic scholarships and am now paying off financial aide loans. I am paying more because I chose to go to an out-of-state school (Go Hokies). I earned it and someday I'll own it, which I think is perfectly reasonable.
 
Mike, go ahead and find a GOOD financial planner, as Bruce mentioned and invest that cash.

When the time comes, unless your child has won a scholarship, have them attend the local community college the first two years. This has a TON of benefits including the fact they will be at home and missing the "75% dropout" rate some of the party schools see for freshman.

By the time they have knocked out 2 years of college for 1/10th the cost of sending them to a big school, dorm, etc etc.

THEN...they hopefully have gotten great grades, send them to the school of their choice for the last two years. (Most community college classes are already 'mapped' to THAT states universities) The amount you have saved will easily pay for 2 years of Comm college and 2 years of the "big school" including dorm, etc those last couple years.

It will also be MUCH easier to get into the "UNC/NCSU/Duke" etc of this world as a transfer than it is to get in as a freshman!

I attended GTCC for 2 years, tuition for 15-18 hours was $150 (1988), books were $250... so my first two years of school cost my folks less than 3 grand. I lived at home, worked 3rd shift, 30+ hours per week.

I then finished at High Point University (private college)...and was able to reduce the cost again by applying for every scholarship/grant I could. (I spent 3 days in the finance office making copies and applying...there is MORE money out there than you would believe, those 3 days saved us $6000 that year)

My dad had lost his job at that point, but my folks were able to pay my entire way thru college one semester at a time. I worked which paid for my car, gas, insurance, spending cash, etc. I lived on campus 1 year (of the five, heh)...and loved/treasure that time, otherwise I lived at home to save money.

Grad school...I paid for myself...

Anyway...long story short...put that cash away...your child will be ahead of 95% of their peers if you do...

Sam
 
Just another thought, My dad cut me off when I acted like a jackass with his $$$. I paid for my own school, worked and got out in 4 years and I'm a better person for it. I worked full time and although I was pissed at my dad at the time for cutting me off, I now thank him for it constantly. I really don't look at colege as being a parental duty unless they want it to be. There are too many programs/grants/scholarships etc. to help foot the bill. I'd be curious to know the graduation rate and GPA of students who were responsible for paying their own way verse those who got "daddy and mommys" ride.
 
Sam made a good point. The only slight draw back is to check if the university your son will be transferring into will accept the credits. Ya' don't wanna do all that for nothing. The other problem with that is that it may take longer to graduate. If your son goes to cc for two years and gets all of his gen. requirements outta the way that he can he will not have taken any of his classes for his intended major. Some majors have classes that have to be taken in a certian order and you may not be able to squeeze all of those into two years. So, to summarize, cc is great for low cost education, if you don't mind having an extra semester or two. -Josh ;)
 
BIGWOODY said:
I'd be curious to know the graduation rate and GPA of students who were responsible for paying their own way verse those who got "daddy and mommys" ride.
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Reminda me of the place I went to HS (Boca Raton, FL). It's a very wealthy community, as it much of South Florida. I only got to attend the school because we used my grandparents' address...
Anyway, thanks to some of the classmates.com type websites, I'm able to see that alot of the "mommy & daddy" scholarship kids (which coincidentally were most of the "popular kids") that didn't have a family business to go into after school are doing very little these days, or working well below their educational level. It's somewhat gratifying in an assholish sorta way.
(Yeah, I'll admit to being jealous back then of a 16-year old driving a new Mustang 5.0, BMW, Mercedees, etc. while I drove around in my little $1200 Dodge POS with no A/C and a missing hubcap)

Tough line to say whether they'll do better if they aren't burdened by having to study and hold down a job and only to study, or whether having to do both will give them motivation to succeed.. Guess it's a case-by-case thing.
Fortunately, that's not a decision I'll ever have to make.. :D
 
saf-t scissors said:
the idea that you're owed something by those wealthier than you is a far left view. .
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I said nothing of the sort. Read again.
 
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