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How we’re saving for our kids’ college

Given that Mr. FG and I have four kids, college savings are definitely on our radar, especially now that our oldest is approaching his teen years.

For many years, Mr. FG and I had to scrimp and pinch just to make ends meet, so we weren’t able to make college savings a regular part of our budget.

During those years, I mostly just sent rebate checks and other small bits of money off to an online savings account. I did manage to amass about $2000 that way, but of course, $2000 doesn’t go super far with four kids.

Now that Mr. FG isn’t working in warehousing anymore, we’ve got a little more wiggle room our budget, so we’ve been able to put a bit of money away each month for the kids, which makes me happy.

Unless something odd happens with our finances, we won’t be able to save enough to pay for 16 years of college, but I am not going to let the perfect be the enemy of the good.

Because having something saved is better than having nothing saved.

A while back, I decided to research my options for special savings accounts, and I considered opening 529 accounts for each kid. These accounts allow you to save for future educational expenses while offering a tax advantage.

Sounds good, right?

The downside is that the money can be used only for educational expenses if you want to keep the tax advantage (if you use the money for non-educational expenses, you are subject to income tax plus a 10% federal tax penalty.)

This is fine if you know your children are all going to go to college. But I thought about how things went with my siblings and me.

My two younger siblings did get their college degrees in business management and in nursing.

However, my older brother does not have a degree and instead worked his way up through the company he started at (he now manages the technology for 5,200 restaurants on the East Coast.)

As for me, I attended college for a year, got married, and then decided to use the rest of my college money to buy my piano.

(I consider this to be one of the most brilliant decisions of my life, given that I would not have used my degree thus far and that my piano has paid for itself over and over and over).

My older brother and I don’t at all regret not going to college…it just wasn’t the right path for us.

As of right now, three of our kids want to follow career paths that require a college degree (two herpetologist-wannabes and one marine biologist wannabe), but Lisey wants to be a pastry chef.

The path to pastry-chef-ing isn’t quite as clear-cut as the others, and we don’t want her to be boxed into having to go to college if that’s not the best path.

Plus, who knows what will happen with the other kids? I’ll be surprised if Joshua changes his mind, but Sonia and Zoe are awfully young to be positive about what they want to do.

So, Mr. FG and I decided to skip the specially earmarked college account and instead, we’ve just got four 360 Savings online accounts open for our kids.

I labeled them as college savings accounts (Joshua’s College Savings), but really, it would be more accurate to label them something like “Joshua’s Future Account”, or “Lisey’s Future Account”.

We figure that this will give our kids the flexibility to spend the saved money in a way that will best prepare them for their adult lives…maybe it’ll be college, maybe it’ll be trade school, maybe it’ll be starting their own business, and hey! Maybe one of them will need to buy a piano. 😉

P.S. I love our 360 Savings accounts because there’s no minimum balance, no fees, and we can set up our monthly contributions automatically.   I never have to remember to transfer money to their college accounts, which is awesome.

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Saturday 17th of September 2011

I must be the odd duck out but in my house it is college school or tech school or something or you aren't living here after 18 years old. Even pastry school costs money and experience. I just read a blog the other day about a pastry chef in my local town you went to Spain to train at one of the top restaurants there. She probably didn't get paid while being trained but needed money to pay for room and board. I really don't care what my kids end up doing but they are definitely going to get some sort of degree or certification, etc.. before they hit the real world. It can be in anything from nurse, hair dresser, chef, or just a regular old degree. I value education way too much to let it slide. I do believe that going to chef school is an education because there is so much more to being a chef than making a good meal. We are saving as much as we can. The grandparents did open a 529 account that they deposit money in. Plus, we have savings accounts for the kids earmarked just for college. I work at home and my entire paycheck goes into their college fund. We just use my dh's pay for retirement and everything else. I hope my kids do something exciting with those 4 years before what I consider "real" adult hood. I hope they go away and live in new place and form their own ideas.


Friday 16th of September 2011

I opened a 529 account for my kids. It was only after I opened it that I found out that I can only re-allocate the accounts once a year. That seems awfully restrictive to me, especially when computers can "high frequency trade" on the stock market all the time. I don't think I would have opened up the 529 if I would have known that.


Friday 16th of September 2011

Something stuck out to me in this piece and I really liked it. You realize that not all of your kids must go to college in order to have a fulfilling career. I live in the Bay Area in California and a major assumption is that everyone will go to college. A friend of mine had a baby in 2010 and said "He's going to graduate in 2022!" I said, "Wow, he'll graduate high school in 2022." And she said "No, he'll graduate college in 2022." It's just assumed. I went to college and graduated with a BA in 4 years. My brother went to college and didn't graduate after 3 years so he left-college just wasn't for him. He has a career and even started his own business. College isn't the end-all be-all of education. It's great if you want to go, but not everyone needs to.


Friday 16th of September 2011

I am not sure how I have missed out on this quote, but that is AWESOME!

'I am not going to let the perfect be the enemy of the good.'

I skimmed through this post on my phone. I could not tell you much about it (even though I know that you have good information in it). But, I caught this quote. In the hustle and bustle of my world, this is fantastic advice.



Friday 16th of September 2011

That was awesome! I couldn't have agreed better! Save their money and let them use it toward their own benefit, college or starting a business or piano! I love it. I started college too but I didn't get a degree, I don't regret it either, I know my limit and abilities too. I'm sure your kiddos will turn out fine and the Lord will always bless them as long as we seek FIRST the Kingdom of Heaven!

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