Conference moira::parenting

    
    Although nothing is specifically earmarked as savings for 
    our children's college educations, we definitely have been
    saving with that in mind.  I hope that something will be
    done to make college education  affordable in the next 
    13 years (Jason is 5!), but feel it is necessary to save
    in case that doesn't happen... 
    
    The two savings vehicles that we have used since joining 
    Digital or since the inception of the plans are the ESPP 
    and the 401k/SAVE plans.  Both of these plans enabled us 
    to divert income that we probably would have just spent 
    otherwise and we now have a substantial "nest-egg".   
    
    If you can afford to, I'd recommend putting a minimum of
    6% into the 401K/SAVE plan so that you can get the 2% match
    from Digital (free money) and whatever you can into the ESPP
    plan selling the stock just after the buy and rolling the
    profits into a college fund.   I bet both of these can be done
    without major impact to the budget.  Once you get in the habit,
    it's really amazing how quickly assets can build!
    
    I believe most planners recommend that you have 3-6 months
    salary in liquid assets in case of emergency but since you
    can cash out of ESPP at anytime (I think), that might still
    be a good place to get your savings started.
    
    
    Carol

    
    
    I have money specifically put aside in a DCU custodial account for 
    Alyssa (she is a year old).  I have it deducted from my paycheck 
    every week so I don't even miss it!   This will be for her for
    college.
    Additionally, I have a weekly payroll deduction for bonds as well,
    specifically for her.
    It is amazing how much I have been able to save without even thinking
    about it!!
    
    I also take advantage of stock and SAVE.  SAVE is excellent because
    you can borrow against 50% of the balance if you need to.  (But SAVE
    is for my retirement, not Alyssa's college education).
    
    With the price of college so high, the earlier you start saving, the 
    more time you have to earn interest on your money.
    
    Nancy  

    
    Both my husband and I are doing the max Save/401K and I'm
    doing max ESPP.  Things are really tight doing this but this
    is for our future so its worth it.  The Save is probably just
    for retirement while ESPP is for cars without a loan, and
    other extras.  We haven't done anything for college eduation
    yet however, my plan is that once we stop paying daycare, that
    entire amount will go into a college fund.  Without even 
    considering interest, that means almost $100K over a 12 year
    period.  I'm hoping that interest will make it twice that
    amount. 
    
    Karen
    

    
    My husband and I max out in 401K, EESP and when my husband
    was self-employed, the Keogh. That's our retirement. My
    daughter will be in college 8 years from now, we plan on
    selling our current 4 bedroom house in a family neighborhood 
    which we bought 8 years ago and buy or build a 2 bedroom house 
    in the woods. Part of our home equity will be her college tuition. 
    I'll be 42 by then and we'll have enough working time to to pay off 
    any college loan if necessary. We have about 6 months worth of living 
    expense liquid. 
    
    
    Eva

5 days before I delivered, my husband and I met with a financial
planner.  At the planner's recommendation, we began putting away 
$250/month into a mutual fund which is earmarked for Noelle's college 
education.  Our goal is to be able to send her anywhere she wants
to go when the time comes.  We plan to keep this fund in our name even 
though there would be tax advantages to having it in her name at the time 
she turns 14.  (I don't want her to buy a Porsche when she's 18 :-)

We put away the max in SAVE and stock.  SAVE is for our retirement.
We sell our stock right away.  (I figure having both of us work
for Digital is enough of an investment in Digital).  Sometimes we 
spend the money, sometimes we invest some or all of it into mutual funds.

The advice I've heard from practically *everyone* with college-age kids
is to put something away on a regular basis -- even if it's only $10/week
into a savings account. 

- Deb B.

    My husband and I started last year (my son is 2.5) saving money
    for our retirement and his college education.  We both work at
    Digital, so we take advantage of the 401K/SAVE plan and ESPP,
    but we also have a financial advisor/planner who we started 
    working with and now have a few mutual funds, some additional
    insurance plans, and an UGMA for my son's education.  We put 
    lump sums in to begin and are trying add to them on a regular
    basis.  We put $1/day in a savings account for my son, then 
    transfer it to his UGMA (Universal Gift for Minor account ?) after 
    a few months savings add up.  This is easy to do, and you really 
    don't feel the impact much.  We will start putting some of the
    daycare dollars in there when he's no longer in daycare as well.
    
    Working with a professional is really helpful too.  Our advisor
    is super.  She reviews all our monthly statements, calls us
    regularly to let us know what's going on (since we don't often
    even open the statements), lets us know when we should move 
    money around into other funds, etc.  
    
    I'm 26 and my husband is 30.  We actually have quite a nest egg
    put away already.  We want to follow in his parents footsteps 
    and be retired at 55!!  They are enjoying their retirement because
    they are still young enough to. 
    
    The funds are doing so much better (interest) than a bank could EVER
    do!  I'm so happy we have a plan now.  
    
    Good luck.  Initially it's a lot of work and research if you plan
    to find a financial planner that you trust and feel comfortable with,
    but it's well worth it!  So many people don't think about college
    money OR retirement until it's too late and they end up getting 
    in financial trouble.
    
    Do your research & start putting money away!  
    
    Julie
    

    Thanks for starting this string.  My husband and I have been discussing
    how to save for college too.  Can anyone recommend a good financial
    advisor in the Shrewsbury, MA area?  Please reply by e-mail to
    FUNIES::CAISSIE.
    
    Thanks,
    
    Sheryl

   one thing I've noted in all but one of the replies so far - all the
   replies are two-family incomes - not knocking it, just wondering if
   any of the single income families out there have any hints ?????

   I'm a single income, single parent and trying hard enough just to put 
   enough money aside weekly to be able to pay before/after-school care, 
   extra coverage for vacation times when I can't get the time off too AND
   pay for *grammar school* education - I know over the next year or so, I'm
   going to be trying to make some changes to start putting $$ away to
   handle high school, but right now I can't even see how to put any
   more away for college while still trying to make ends meet !!  I do
   know that whatever, when the time comes, I'll find some way to send
   him to college, but the years are going by faster than I'd like to
   face !!  And, of course, he's getting close to the teen years which
   means more expensive clothes, more *food*, more extra activities which
   I can't afford !!!!!

   Don't get me wrong, I love him to death, I just wish I could do more
   for him *NOW* and be sure of providing for him in the future too !

    Thanks for all the replies.
    
    We need help!  If you know of a good financial adviser in the 
    North Andover, MA area, please send MAIL!  Quick!
    
    Tara 
    DEMON::PANGAKIS

    
    What does a financial advisor cost?  I've been considering this
    for a while.  
    
    BTW, a few months ago, in an issue of Parents magazine (I think
    thats the one I get or is it Parenting).  Anyhow, there was
    a small article on saving for college and some phone numbers to
    call to get information in the mail.  I called and got two packets
    and so far have not opened them!  One was from Fidelity and was
    specifically geared towards saving for college.  The other was
    from another large investment firm that I cannot recall, also
    college oriented.  
    
    I'll try to remember to post the phone numbers here but it could
    take me a week or two... 
    
    Karen
                     

    re .8
    
    I resemble that remark.  Lolita was 9 before I got a job which wasn't
    bare subsistance and minor things like dental care and orthodontia
    rapidly got in the way of saving money for more than the down payment
    on a house.  (Stability was and is very important to us, after 10 moves
    in three years, mostly due to landlords deciding to sell or change the
    zoning of their properties.)
    
    We also had several years of trying to get out of the hole we had been
    in from being so broke. I also added two more kids to my household and
    Frank, but that is a different story and one which means parts of the
    following will be replayed twice in the future.  I am trying to put
    some money by for Carrie and Atlehi, but they also need a life beyond
    the basics, Lolita has three semesters to go, and we also have one
    income.
    
    Fortunately my mom is a firm believer in education and has helped, and
    I can pretty much handle most of the in-state tuition and part of her
    rent on my own.  She does have to work to afford luxuries (like food),
    has learned how to economize on books, and she does qualify for some
    financial aid.  She doesn't have a car, but does have a good bicycle
    and Ft. Collins is a fairly bike-friendly town.  
    
    Lolita went to a private college for the first two years, but she had
    won a scholarship which paid 1/2 of her expenses.
    
    There are ways to economize.  The first two years of most programs can
    be covered in a community college, where the tuition is cheaper and
    your child can live at home.  We found the computers in the labs of
    most schools are more than adequate, so she doesn't "need" a pc.  She
    buys used book whenever possible and sells them after the semester if
    they won't be needed again.  When she was at Sterling College, she used
    the reference section of the library, where there were copies of the
    textbooks available, but not to check out, and did her homework from
    there.  
    
    If you are looking at an Ivy League school, well that is a different
    matter.  
    
    meg

See note 223 in the NYOSS1::MARKET_INVESTING notesfile for a couple thoughts
about financial advisors.  In particular the warning about "commission based"
financial advisors...

I ended up skipping the advisor and learning on my own...  I'm a lot more
comfortable with understanding things myself.

Also, the following two notes in NYOSS1::MARKET_INVESTING had some good info as
well:

   339  SDTMKT::WALKER       30-DEC-1992    38  Saving for College - Advice?
   737  GRANPA::JHAGERTY      1-JUL-1994    21  retirement and college


The toughest part of all, imo, is the discipline to save regularly 
(escpecially now that we're back to a single income family).

just my 2 cents,
Dan    

We're into the 401Ks (my wife works at another company) and bonds for our
retirement and have a mutual fund setup for both children with $50/month taken
out for each.  Having all this taken out of our paychecks is the easiest way to
do it.

While we'd like to be able to fully pay for everything when our kids get to
college, we'll probably still have them take out student loans.  We both had
student loans and it taught us fiscal responsibility as soon as we graduated
since we had to repay them.  It also gave us a nasty taste for having long term
loans so now all we have is 12 more years on a 15 year house note which we plan
to pay off in about 8.

My parents traded semesters with me - they'd pay for the first half of each year
and I'd take a loan for the second half.  That worked out pretty well and we'll
probably do something similar with our kids. 

Dave

And timely for me, since I have just been coming to the realization that *WE HAD
BETTER GET CRACKING!* My son is 5 years old, and my daughter 18 months. That
means we at least won't have to pay for two at once, offering a little breathing
space.

I will be checking into some of the items and other notes listed here, but I was
wondering, what are good savings vehicles that protect your savings for their
intended purpose? My recollection of financial aid when I applied for college in
1978 was that they first wanted to know how much money the family had saved,
allocate all of that to college, then they would base financial aid on the
shortfall after exhausting all the family's resources. That's probably not
correct, but if I would like my son to get some financial aid in addition to
what I kick in, how can I keep them from requiring that all the savings for my
daughter also get figured in? I realize I can protect our retirement savings
(when we get some...) from college expenses, but what about other savings? I
don't expect other people to pay for my kids to go to school, but I would hope
that I don't have to destroy all my other savings to do it and still be able to
qualify for loans, grants, and scholarships. We also need to protect against
ourselves, given our poor track record of savings. I just want to make sure that
the money I allocate to my son's education goes to his education, the money I
allocate to my daughter's education goes to her education, and the money I
allocate to post-college/pre-retirement savings goes to that.

Do "custodial accounts" and "UGMA's" do this? What about things like bonds that
mature on a specific date? My general plan is to pick some target dates (like
August, 2008, and August, 2012, when my kids will start college) and establish
savings programs for each one.

    My understanding, which may be flawed, is that colleges will require
    you to spend some percentage of the parent's assets, and all of the
    children's assets. SO if kids have money in their name, although you
    may not pay taxes on it, you will probably have to spend it all on 
    college education. Also, your child may decide that that
    Harley-Davidson or Corvette is a much better investment than a college
    education and spend the money in his name on that. 
    Some things to think about.
    Sue
    

    We have UGMA accounts for our kids who are 4 and 18 months at Charles 
    Schwab.  We contribute monthly - electronically the money goes from our
    checking account to Charles Schwab and then into the mutual funds we've
    selected.  The age of majority is 21 so at 21 the kids can do anything
    they want with the money - hopefully they will have already gone to
    college and the accounts will be empty.  I believe the trustee of the
    account can use the money to pay for private elementary/secondary schools
    as well and anything else for the child's benefit.
    
    At some point, I think we'll stop contributing to the UGMA accounts and
    start saving under our own names just in case the kids don't go to
    college.
    
    For financial aid, kids must spend a greater percentage of their assets
    then their parents do but I don't remember the numbers.
    
    Carol

After reading through the notes in NYOSS1::MARKET_INVESTING referenced earlier,
it looks like a good plan is to just use our own names on accounts, not the
kids' names. Too many people point out the possibility of kids getting wild
ideas about how to spend all that cash, and the college funding formulas use up
a much greater percentage of their assets. Somebody mentioned 20% of parents
assets vs. 75% of child's assets, though these were not exact numbers and may
have just been general examples (does anybody know exact numbers? Do they vary
by institution, state, etc, or are they federally mandated?).

On the other hand, if I put all of my son's college funds in his name, it
doesn't matter if the college funding formula requires 100% of his assets,
that's what I put the money there for in the first place. The only thing to
consider is how much of his assets he actually earned himself. 

I'm just glad to know that one kid's college education won't force us to break
the bank, so that we can handle the next one. Of course, who knows what the
state of affairs will be in 12 or 15 years. Some of our Heroic Leaders in
Congress seem to feel that if you can't afford an education up front, you don't
need it. Now that's planning for the future!

>> re :.17
 >>   have just been general examples (does anybody know exact numbers? Do they vary
>>by institution, state, etc, or are they federally mandated?).
    
    According to Working Mother magazine (Nov,1995 p. 25)
    
    	"Currently parents are called on to contribute a maximum of 5.65
    percent of their assets for college costs, while students must fork
    over up to 35 percent of theirs."