T.R | Title | User | Personal Name | Date | Lines |
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251.1 | Try financial planners. | STAR::MACKAY | C'est la vie! | Mon Aug 13 1990 15:09 | 8 |
|
There are a lot ways to save, some tax free...Talk to a financial
planner, like folks in Merryll Lynch, Fidelity Investments, etc.
They can give you some good ideas.
Eva.
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251.2 | | CLOSUS::HOE | Daddy, what is war? | Mon Aug 13 1990 16:07 | 10 |
| We started a savings account for Sammy with all the monies we got
at his baptism, birthday monies and gift monies. Along with that,
I am taking a $5/week deduction into the same account so that he
can use it when he decides on education beyond his high school
basic education.
His grand parents on both sides has gift-to-minors accounts set up
for his education also.
calvin
|
251.3 | Pointers. | IOSG::CORMAN | | Tue Aug 14 1990 05:52 | 15 |
| See these notes in the SUBWAY::INVESTING notes file.
--------------------------------------------------------------------------------
Investing and Computing
Created: 17-MAR-1986 10:02 1920 topics Updated: 13-AUG-1990 21:53
Topic Author Date Repl Title
--------------------------------------------------------------------------------
351 OMEGA::BROWN 29-DEC-1986 11 Munis For College Fund
823 CIMNET::NMILLER 10-DEC-1987 8 Need college financial aid info
1129 CSC32::J_WARDLE 2-SEP-1988 0 College for Financial Planning
1143 POBOX::ROSENKRANZ 22-SEP-1988 20 Planning for College
1151 GUCCI::CONDON 3-OCT-1988 2 College trust funds & bonds?
1219 WINERY::BOUCHARKE 12-DEC-1988 23 saving for college
1227 STAR::HARRIS 19-DEC-1988 0 Info on College Funding System?
1602 VMSSG::NICHOLS 27-NOV-1989 11 ?Series EE bonds as a college vehicle?
|
251.4 | Vote - financial planner | MAJORS::MANDALINCI | | Wed Aug 15 1990 05:38 | 25 |
| Personally, I would second the vote for a financial planner or a
financial analyst. A planner is better because they will help you do the
investing rather than an analyst who will tell you things like "you
can afford to put away X dollars every week" but never tell you where
to invest the money to get the results you want.
I have the luxury of having an uncle who is a financial planner and he
has recommended a certain "program" for us that will fit our needs for
the college education of our children (too late for the 2 we will be
covering over the next 7 years but in plenty for the younger children).
Do check around. We originally went to American Express Financial
Services based in Boston. We paid $300 for "life-time membership" for
them to do our financial protfolio. They ended up telling us, since
you have no money saved (spare cash around), you have nothing to invest
so you'll never have money earning for you. It seemed a little stupid
becasue we knew we didn't have wads of liquid cash, but wanted to be
told to "invest" X $'s into something that would prepare our future. We
plan on going back to them once we return to the States and get our
"life-time membership" out of them.
It is estimated to be approximately $40,000 a year for a college education
by the time my son starts. We better think in advance.
Andrea
|
251.5 | Bonds | NETDOC::VASSIL | | Wed Aug 15 1990 11:38 | 13 |
| Hi,
My husband and I started to worry about the ole' college fund.
Our son is 4 1/2 and one on the way. About 1 year ago we started
to have $5.00 deducted from my check for bonds. Never miss the $5.00
and now the bonds are starting to add up. Maybe by the time Pete is ready
for college we may just have enough (for one of them anyway!).
We were thinking when they matured, cash them and put in a money
market. We don't know too much about bonds or how they work.
Linda
|
251.6 | watch your money buckets | ULTRA::ARGO | | Wed Aug 15 1990 12:05 | 7 |
| re .3:
Good pointers! After looking through this notes file a little, it
is clear that not only should you start saving as early as possible,
but you must be very careful into what buckets you save.
Dennis
|
251.7 | Who wants to be a millionaire... I do! | ODDONE::SANWELL | | Thu Aug 16 1990 07:18 | 18 |
| We are expecting our first in January 91. Recently we have been
thinking about savings account for 'junior'. Obviously education
is top of our list, but it is frightening to think about all the
other things we would like to save up for him/her. ie. If female,
how about a fund towards her wedding (very expensive). We would
also like to have the funds to buy his/her first car on 17th birthday.
Also with the way house prices are we would like to put a bit away
each month towards a deposit for a house. I know these are long
term investments, but with the amount of money we would have to
save to do at least 1 or 2 of these things I think we should have
started 10 years ago.
Of course the above is over and above the every day 'running' expenses.
Anyone qot a million they would like to leave me in their will.
Barbara Hough
|
251.8 | some issues to think about | TLE::RANDALL | living on another planet | Thu Aug 16 1990 10:05 | 60 |
| Some thoughts on financing children generally and college
education in particular:
The first thing you do before you start saving for the kids,
whether it's for a birthday car or the tuition for Harvard, is
come to some kind of an agreement with your spouse about what is
essential for raising the child, what would be nice, and what you
wouldn't buy even if you were as rich as Jackie Onassis. I speak
from experience when I say that if you're putting aside money that
could be used for other family needs in order to meet a goal that
one partner considers unnecessary, there's going to be a lot of
stress in the marriage around that issue . . .
Different people from different backgrounds have different values
on these things. In my tradition, a bride gets the wedding her
parents can afford, or she pays for it herself, or (most likely)
she and the groom both pay for it, with both families pitching in.
I'm not saying this is right, or that anybody else's marriage
tradition is wrong, only that for me, saving for my daughter's
eventual wedding (in this day and age, she might be 30 or more by
then, if she ever marries) is not just unimportant, it's
irrelevant.
Similarly, you have to decide whether your college goal is for "a
college education at whatever school is cheapest," "a good
school," or "any school she wants to, even if it's Harvard." Many
people feel that if their child wants to go to an expensive
school, they should contribute the difference between an average
education and the expensive one. Again, I'm not saying that any
of these goals is right or wrong, only that it's important that
you and your spouse discuss these issues, understand each other's
views, and agree on some kind of plan of action.
And then you have to prioritize these goals with the goals of
other members of the family. Is a private education worth more to
this particular family than the daughter's wedding, the father's
desire to see the world on vacations, the mother's desire to start
her own business, her wish to get a graduate degree or his to own
a second home or a boat or moving to the country where the kids
can grow up with fresh air and chickens?
For instance, a friend of mine left a plush investment banker's
post to become a loan officer at a very small bank in Colorado.
His kids were 11 and 9 when he moved. They made a number of
sacrifices so they can live in their mountain home, but they all
agree it was worth it, even if the daughter is probably going to
Colorado State instead of to Smith, which she has the grades for.
She says she's going to get an excellent at CSU, and it's what she
does with the education over the next 70 years, not where the
paper came from, that will matter.
I have another friend who has taken on a second full-time job.
She's an executive assistant in the day and a retail sales manager
at night so her daughter can go to Yale.
Who's right? Both of them. Because there aren't any right
answers, only what's right for your family. But it's a more
complicated issue than it appears on the surface.
--bonnie
|
251.9 | my *opinion* | TIPTOE::STOLICNY | | Thu Aug 16 1990 10:30 | 6 |
| re .7 I know it's all personal preference, but I'd definitely
get the house NOW and worry about cars, weddings at a later date.
You could always take out a home equity loan in 18 years for those
things....
fwiw, cj/
|
251.10 | I don't want to mortgage my home for 25 + 25 years! | HPSCAD::DJENSEN | | Mon Aug 20 1990 07:09 | 54 |
|
I'd like to think that we "can" worry about JA's college education
"next year" ... but the fact of the matter is, you CAN'T! Just sit
down and calculate what 4 years of tuition and expenses at the local
STATE university is and then ask yourself "even if my house is paid
OFF, "CAN" I draw enough ... and would I WANT TO DRAW THAT ? !! ...
extending out a mortgage another 20 years or so (no doubt into your
retirement, etc.) !!!"
Bottom line: You've got to save ... somehow ... some amount ...
anything! ... stash it away! Even pocket change is "something" which
amazingly adds up!
I've known people who save all those iddy-bitty manufacturer rebates
into a child's savings account. My sister/brother-in-law make their
kids save 1/2 of all their income (paper route, birthday money, etc.).
My folks did small Christmas Clubs and then rolled it over each
December into our savings, along with Savings Bond stamps (via the
school system ... each week you buy a stamp or two and when your book
is full, you go to the bank and get a bond ...). Granted, we didn't
have enough for our college expenses, HOWEVER, it sure did help!!!
Then my folks made a deal ... they'll pay the first 1/2 of our college
expenses and we pay the second half (then we have time to adjust to the
responsibility AND "save" ... and use the funds they helped us save).
We survived!
Jim/I "save" ALL of JA's gift money ... and make a weekly contribution.
It's DEFINITELY NOT EASY!! There's many a week when the alligators
seem to be closing in on us and we can't seem to drain any water from
the swamp!, BUT ... try to stay focused on the long-term consequences
and then saving "even that little amount" seems VERY important. (Our
accountant recommended a "...Child's Act" savings account, which is
tax-free until the money's withdrawn ... available through the DCU.)
I saw a TV show recently which addressed college expenses and (I hope
you're sitting down for this one!) ... if you save "minimally" $25/week
"at birth", your child will make it through an "average" undergrad
program ... BUT, if you wait until the child's "7" to begin saving, you
need to double that $25!! ... and the scale continues UPWARDS!
Now, Jim would like to believe that "the government" HAS TO become more
involved in this problem, but I'm sure not depending on THE GOVERNMENT
to educate my child!! And the current status of student loan paybacks
(from graduates) is STAGGERING (at best) ... that program's gone
bust and will be "history" long before JA starts college! When you see
the GOVERNMENT's involvement in elementary schooling, how can you
possibly expect any assistance with "higher education"?!! I'm
definitely not banking on any "assistance" being available to JA in the
year 2007!
So, it all boils down to "OUR" responsibility!
Dottie
|
251.11 | clarification | TIPTOE::STOLICNY | | Mon Aug 20 1990 09:19 | 13 |
| re: .10
Dottie,
I'm not *really* advocating drawing against one's home for a
college education. Ignoring the Massachusetts market :-), home
ownership is usually a fairly decent long-term (and I guess 18
years qualifies as long term) investment that tracks inflation
fairly well. (I don't want to get into a "discussion" about real
estate in this note). I guess I see mortgage payments as more
"useful" than rent payments, that's all!
Carol
|
251.12 | you need to pay attention to the tax laws too | TLE::RANDALL | living on another planet | Mon Aug 20 1990 09:37 | 13 |
| According to a friend who sent her son off to his first year of
college last year, under last year's tax laws it was more
advantageous to take a home equity loan for college expenses *even
though she had the money on hand* because of the deduction she got
for the interest she paid on the loan.
Again, that was last year's tax laws. She says the advantage
isn't as great this year, and who knows whether it will be true
in the future. One of the hardest parts of the planning is not
knowing what the tax laws will be or what kinds of programs and
problems are available. You kind of have to guess.
--bonnie
|
251.13 | | STAR::MACKAY | C'est la vie! | Mon Aug 20 1990 09:46 | 9 |
|
A brighter side, once the children do not require daycare
(read big bucks), some of that money can go into college fund,
say 50%. We just have to be disciplined enough not to spend that
money somewhere else.
Eva.
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251.14 | $nnn,nnn paid for TWICE? !! | HPSCAD::DJENSEN | | Wed Aug 22 1990 14:00 | 26 |
|
Carol:
True, mortgage payments is DEFINITELY more beneficial than rent
payments!, however, paying my mortage is PAINFUL and I wouldn't want to
have to do it TWICE (refinance for college tuition) -- especially
during a time when I'm planning on retiring (on a fixed income).
---------------------------------------------------------------------
I know we're getting offtrack (real estate vs. college expenses),
HOWEVER, incurring a large expense (mortage) to get a tax writeoff
(of a percentage of the "mortage cost") doesn't seem like a BIG benefit
to me, either ... whether it's to pay for college expenses, home
improvements OR WHATEVER!
I guess you can tell from "my tone" that I am HELL-BENT on paying for
it BUT ONCE! I don't see our mortage payment as "nnn/month, but
rather as $nnn,nnn spread over 20-30 years!! When you see your
mortgage in 6-digit numbers, it sure is an eye-opener!
Back to college ... I'll keeping feeding JA's piggybank, cashing
manufacturers refunds and making a weekly donation (the best I can)
and HOPE FOR THE BEST!
Dottie
|
251.15 | | CSC32::J_OPPELT | Just make more friends than foes. | Thu Aug 30 1990 19:53 | 33 |
| With expected college costs running at around $40K when my kids go,
there is no way I can afford it. We have 4 kids, so popping $25
per week per kid is simply impossible. If I could afford to sock
away $200/week, I wouldn't have to worry about affording college!
When I went to college, (there were 5 kids in my family), my
parents offered to pay all room/board costs. We each had to come
up with the rest. We took out student loans, worked summer jobs,
got financial aid, and took on-campus jobs. We all made it.
My kids will do the same.
Actually, I envision a "corporate ROTC" for college students. As
college education becomes more and more unaffordable, fewer
students will opt for college, and the pool of educated workers
will drop. Corporate America will be forced to put their "rookies"
through college to ensure quality students continue to graduate
to staff their positions.
Still, I have a small account for each of my kids. I put $2/week
into each. They will not know about it until they go to college.
The meager sum that they will get from it should help buy books
and what-nots, and it will be a nice send-off for their freshman
years.
And I agree with some previous replies: It is only under limited
circumstances that the college you get your degree from really
makes a difference. In fact, it often doesn't matter what your
degree is in! It just matters that you have a degree so that you
can show that you are educable. Much of your college education
is not really applicable to the real world...
Joe Oppelt
|
251.16 | Terror tuition not realistic (I hope) | MINAR::BISHOP | | Fri Sep 07 1990 15:01 | 47 |
| Some basic points:
1. As .12 says, laws and programs are going to change; what
makes sense now may be the wrong thing. The fact that
this makes life hard (or that the current rules might be
offensive to your values, as they are to mine) is just
something you'll have to live with (or run for office...).
2. Currently, most institutions follow a set of rules which
calculates the "contribution" of a student and the student's
parents. The scary figures given (e.g. $15,000 for a year's
tuition) are the _maximum_, not the default. As an example,
the rules assume:
A student will use up almost all of his or her savings, and
most of his or her income (and will make something like $2000
over the summer--I forget the exact number).
Parents will use about half of their savings for all their
children--the exact percentage depends on the number of children,
the ages of the parents, and the amount of savings. Parents
will also use something like 5% of current income--the amount
depends on various factors, again.
Once the contributions have been calculated, institutions figure
out a package of grants, loans and so on to fill out the rest of
the nominal cost.
3. The "terror tuition" predictions are most likely to be false.
They usually assume that tuition cost can grow faster than
inflation for decades, which is unlikely. Given the baby bust,
there is going to be a lower demand for college educations,
and thus tutition costs might well begin to grow more slowly
than inflation. Compare the tuition-cost arguments to those
given for housing prices--they both grew rapidly for a while
but can stop (and go backwards) anytime!
5. Saving money is good anyway.
Now, I've just set up a trust for my son, but that's due to some
special circumstances--for most parents I'd recommend just saving
in the parent's names and going into equities (see INVESTING for
details). It's important to do the clarification of goals which
Bonnie recommends, and to be educated in the area before you make
any irrevocable moves.
-John Bishop
|
251.17 | | RDVAX::COLLIER | Bruce Collier | Thu Sep 13 1990 17:12 | 35 |
| I'm afraid I feel that .16 is rather too comforting on several grounds.
It is correct that there are fairly standard ways for calculating
"parental contribution" from family income and savings. But the
aid offered won't necessarily be painless. It starts with summer and
term-time earnings, but likely moves on to market rate loans (to both
parents and student), and not to significant grants for most families.
In addition, there are VERY few colleges left which do need-blind
admissions. Most have little scholarship money of their own, though
they will help you try to get loans. They may well agree with you that
the aid package they offer is inadequate for you to meet their costs,
but that doesn't make it get bigger.
Finally, it is a safe bet that college costs will continue rising
faster than inflation, as they essentially always have. The
preponderance of college expenditures are for salaries, and all
salaries tend to exceed inflation over the long haul (let us very much
hope this doesn't change). It seems likely that government funding of
higher education (both federal and state) will continue to shrink,
which will make tuition go up more. College enrollments have already
been shrinking for a decade, and this only tends to force tuition up
more. Unlike the housing stock, the supply of college "slots" can
shrink in the face of declining demand, through faculty retirements and
layoffs. Yet costs do not shrink in proportion to declining
enrollment, as some costs are fixed, and some economies of scale are
lost. Either tuition must go up more, or the product must be diluted.
On the other hand, parents with kids in full time pre-school may
already be paying at something like half the college tuition rate! If
they can manage to save comparable amounts when their kids reach public
school age, they can both afford college and retire wealthy! I wish I
could figure out why that wonderful advice is so impossible to follow.
- Bruce
|
251.18 | Woodmen of the World's program ? | FORTSC::GUPTA | Abha Gupta | Wed May 01 1991 19:36 | 11 |
| I am interested in knowing about the Woodmen of the World's fraternal
benefits program for the College tuition assistance. If some one
out there has used, heard or know about this program, I would like to
hear your opinion. One of their agents is selling this program in
our area to the High School students.
Thanks in advance
Abha Gupta
|