Our financial advisor discourages us from putting aside TOO MUCH for college funds for our kids (ages 13 and 11). We have some put aside for them but he always encourages us to pay ourselves first -- plan for our retirement years.

He has solid logic behind it (ie the kids might not go to college... may have different plans for their lives! and they learn more about finances from paying for college themselves, etc.).

He has raised kids and so we do feel that he offers some good advice on this. Besides that, he's really has us put our money into funds that have steadily grown over the past 20 years that we've used him.

What advice can you offer... especially parents who have gone through raising children into their 20's???

I want to make sure that we do the right thing for our kids. Thanks!

We are firm believers in planning for the kids education. After all, an investment in their education is an investment in our peace of mind for our future. We wanted to give them every tool possible to "fly from the nest" and be self sufficient adults. The only thing we have asked of them is to give us our money's worth which is no different than when they purchase a product or service from someone.

When the kids were young we purchased prepaid college tuition credits. The program is set up to buy college credits at the current rate and when you cash them in during the college years, it is at the new rate. It has been a life-saver for us financially. Our oldest is starting his second year of grad school and will graduate with a masters May 09 and the other one is starting his sophomore year at college.

We have told our kids (I have a DSD to) that they will be paying for college. That being said we give (and plan to with the younger ones) them chance to volunteer and free time to particate in ativies at school and expect excellent grades, all of which we do with the hope that htey will be in a better position to qualify for scholarships. Some schoalships are need based, if the parents save too much the kids don't qualify. We both paid for our schooling (we still ahve a few years left on my student loans) but that experiance gave us an understanding that we respect now.

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saraedawson@yahoo.com

Mommy to Jake, Alexis, Abigail and Joshua, Wife to Matt

We do not have an official "college fund" nor do I plan to start one. We do have a savings account that we play the market with. Money the kids get for birthdays and holidays...half goes to them and half to savings. IMO, it is not a wise choice for parents to put money into a savings/college fund for their kids until AFTER they are sufficiently funded their retirement account. Kids can take out relatively cheap loans to pay for college. You cannot take a loan our to retire on. That is my way of thinking. My kids can pull out a loan and work thru school. Nothing given to you is as appreciated as something you earn. Plus, it gives them a leg up in the "life" dept IMO. Now if my retirement is set and I can pay for their college...great, wonderful. I won't pay it all. I think that's a disservice to them. They are as likely to party and fail classes if they are paying for them. This is strickly life experience talking here...not everyone applies here obviously but I pull strongly from what I have seen. My MIL paid for my DH's college and he's grateful (the exception to my rule I would say) but she didn't put money away for her retirement and NOW she's feeling the *pinch* (14 years after DH graduated). He now feels guilty about letting her pay all those years ago.

So, it's really a personal decision. I know lots of parents who have well funded education plans for their kids but no savings for themselves and they don't fund their retirement. So, when someone loses a job...it's not a pretty site needless to say.

Hope that is helpful

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The one piece of advice I have been given, which I am planning on following, is that your children can finance their college educations but you can't finance your retirement. That being said, we are planning on getting a really good start on our retirement savings before worrying about how much money we have saved for our children's education.

Something to consider is what your income level is. At our present income level and the current way financial aid is calculated, if we do not have a college plan, they get almost a free ride, but if we save for college, we are penalized.

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I dream to escape!

I have heard that advice before, too. And, I agree with it - save for your retirement before the kids college.

That being said, we put into both each month. We have the 529 accounts set up for the girls and we make a nice contribution every month, but it is not near the max and it will not fully fund their college education, though it will pay a large chunk of it. DH & I both paid our own way through school and feel we missed out on a lot because we couldn't afford it or were working. Then when we got out, we had all the loans to pay back. We want our girls to be able to enjoy it more and start their life with less school debt than we did. However, they will be required to contribute somehting...we just dont' know what or how yet. Our oldest is a freshman in high school this year, so we've still got 4 years to figure it all out.

Lisa

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For the most part, financial aid is hard to get. You must have a very low income in order to qualify. We are middle income and our daughter wasn't able to get one cent of aid. She could apply for student loans, but no *free*money, the loans would all involve interest payments. We ended up paying for her first year of College, and we split her second year. Now, she is married and will have to pay for her final two years.

I worked my way through college and got scholarships, DH went into the military served 8 years utilized tuition assistance while in the militatry then utilized the GI Bill after getting out of the miltary to finish his bachelors and masters degrees. We do not feel it is our responsibility to fund our childrens college, now we did help them with gas, books on occasion, child care, food when needed but only when they had no other resources. We have one that has finished college, one that has one year left until graduation and a 12 year old. Both older girls got part time jobs at 16, we instilled a strong work ethic in them, nothing is handed to you, you have to earn it. We did give the middle child a car at 16 because she was super responsible. Each kid is different. Both older girls were able to get mutliple scholarships so paid very little out of pocket for actual school expenses, but still had living expenses. Our youngest is the brightest one of the three plus very athletic (which the others were not athletic, two are extremely smart, one is extremely artistic) so hopefully she will get a scholarship also. Being the youngest and only one at home we constantly have to check ourselves to not spoil her too much because she is the baby. It's not like we don't believe in investing in things involving education (we do pay $25 an hour for a pitching coach, but she has played softball for 7 years, fast pitched for 3 years, lifts weights 3 times a week at the gym getting ready for junior high team this fall, practices her pitching every other day and does this all on her own without urging from us, so we know she is serious) that's what she is interested in. The older girls art lessons and guitar lessons were paid for both, so it's not like they are deprived or anything. But we do believe that if they have to work for something they will value it more than if it is just handed to them. So no we don't pay for college, but we will pay for some of the side expense ocasionally like books and gas and they can live at home for free as long as they are in school

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We did pre-paid college for all 3 kids. Let me tell you it is a Godsend now that all 3 are in college at the same time!

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DD started working at the mall when she was 15 and began saving for college. She was an honor student and was able to get some scholarship money. She saved enough to pay for her first year of college. We paid for her second year while she continued to work to save enough to pay for her third year and we paid for her fourth year while she continued to work and started saving for a down payment on a house.

While most of her classmates graduated owing thousands of dollars worth of student loans, she was able to graduate not owing a single penny in student loans

I believe that having her invest in her own education rather than just paying for it ourselves made her a much more responsible student.

This is the advice that our financial advisor is giving us...

I put myself through college 100% (paid off the student loans within 1 year of graduating!) and DH had his way completely paid by his parents so we can draw from both sides as far as our own experiences.

I'm enjoying reading the posts and points of view.

The advice you are getting from your financial advisor is specific to your financial situation (including tax considerations) and not everyone is in the same financial boat (so to speak). For that reason, I'd listen carefully to what the professionals think.

We are saving for both our retirement and recently started saving modestly for college for our 12 y.o.. We have also been advised to save for retirement first since college can be financed and retirement cannot.

My mom left enough for college to pay for the kids, so we don't have to worry about it.

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"Is God willing to prevent evil, but not able? Then he is not omnipotent. Is he able, but not willing? Then he is malevolent. Is he both able and willing? Then whence cometh evil? Is he neither able nor willing? Then why call him God? " ~Epicurus

First make sure that your retirement is full funded, then start saving for your kids college. Kids always have the options or grants, loans, scholarships, work-study, working, etc. if they just look hard enough for it. It really depends on your financial situation, ages of your kids, tax bracket, etc., so the information from your financial advisor is probably the best source. However, if you don't agree with him, you can always make your own choices.

Both my kids have two 529 plans each -- one that DH & I contribute to and one that my parents contribute to (for each child). You can use 529 money for things other than school, but there is a penalty for doing so. These plans won't fully fund our kids college, but it will help.

When I went to college, my parents and grandparents had invested for me. Once that money ran out (and it did), I had to foot the rest of the bill myself. I worked nearly 40 hours/week and went to school full-time. I got out of college with NO debt. So, yes, it can be done. DH & his brothers and sister had no money for college and they all managed to get at least an associates degree (one has a 4-year degree, but ironically, she makes the least money), so it can be done. No, it's not easy, but not impossible either. All 4 of the siblings are employeed in good jobs (one is a high level manager and the other an executive, both under the age of 35) and make at least enough to support a family.

DH & I strongly believe that kids should be partially responsible for paying for their college and should come out of school with as little debt as possible -- otherwise its just a big 4+ year party with a HUGE bill at the end. I don't think kids should have to foot the entire bill (as DH & I did), but I think they at least need to show a good effort in paying for as much as possible through academic scholarships, working and saving, etc.

Sarah.........

In hindsight, this is an area that I should have spent a lot more time researching and planning for. In the end, because we have saved and have a high income, we have the "opportunity" to pay for the whole thing ourselves. For more modest incomes with some planning (i.e. hiding/spending of assets), there are grants, etc to help academically qualified students afford college. I met a guy at the Y who retired just before his kids went off to college and ended up paying almost nothing from his pocket!

The really good colleges are so expensive that it isn't really possible for a child to work a part time job and make a dent in the cost of college like I could when I went through. We're talking 25-50k per year now (including room & board)...how does a kid earn that? Further, I just can't see strapping a kid wiht that kind of debt upon graduating from college. It's such a different world than 25 years ago when I paid $3k/year to get an engineering degree from one of the best engineering schools in the country.

cj/

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I was walking home one night and a guy hammering on a roof called me a paranoid little weirdo. In morse code. -Emo Phillips

I really hope the HOPE scholarships (lottery funded full scholarships for Ga students that stay in Ga) are still around. DH went through school on a HOPE scholarship and they even paid for books. It means we can't leave the state but we don't plan to either. We are putting aside a small amount in a 529 but saving for our own retirement because any money we save for them, they will be penalized for when it comes time to apply for need based grants. They don't count retirement savings against you the same way. You can also always take a loan out against your retirement accounts. It is sad how you are penalized in this country for doing the right thing and saving.

I hate to say this, but it is very unlikely that the HOPE will still be available, at least at the current level, when today's elementary school children get to college. My oldest is in third grade and we are NOT counting on HOPE for him, although it would be awesome if it was still avaialble. HOPE does pay a little for books, but not much -- my friend said it was enough to pay for ONE used book for her daughter in engineering at Georgia Tech.

Sarah.........mom to Jason & Devin

I work at a community college, so my two sons did not have to pay for tuition when they attended school here.

My youngest decided to go onto a four year college. Unfortunately, my husband lost his job. His severance and retirement was paid in one lump sum, which made it impossible for my son to be eligible for any kind of financial aid. They told him, "your parents can more than pay for your college"....yeah, right! That was our retirement they were referring to!!

I think, since my son has had to take out loans and pay for his books and food with what he earns, he does take his schooling much more seriously than he did when he was going for free. My husband and I decided that we would prepare for retirement and if we could help him pay back his loans, we would.

We'll do anything to get our three daughters thru college and we don't mind paying for it. We are firm believers in college educations. We were married at 18 and we both have degrees now. Believe me, it wasn't easy but we did it.

Our oldest will be a junior in college this fall and our middle daughter will be a senior in high school so next year we'll have two college kids. Yea, it's expensive, but SO worth it. Honestly, our girls don't have the option NOT to go to college, it has never been discussed. It has and always will be expected of them. They have talked about going since they were very young and look at it as another step in their lives.

Financially, I don't have to work (DH does very well) but I work part time as an RN and that money basically goes to the girls for college. Do I mind? No way. I'm blessed we're able to do it for them. We even bought a house in the town our daughter goes to school so we don't have to flush rent money down the drain. She rents out the other two bedrooms. It still costs us about $300 more than if she was in an apartment but the loss is a write off and the money isn't wasted.