<p>talked to a very close friend today. They have saved a decent sum of cash for their child’s college. But the child got a generours FA package and did not have to use the savings. They told me their total out of pocket expenses per year will be less than their two months’ take home.</p>
<p>They want to spend some of this $$ on vacations and may be even an S430. </p>
<p>I don’t think that they were trying to game the system so I told them that there is an uncertainty in the whole economy right now. It is probably better to have the cash in hand. What do you think?</p>
<p>^^. I don’t know the details, could be merit $$.</p>
<p>I said if you really want to spend some $$, do remodel your kitchen or something like that. </p>
<p>My point is that, now, cash is king. Even if they don’t have a use for the money now, it is better to have the cash in hand just in case. Their point is that the sky is not falling and they want to have some fun.</p>
<p>I’d probably try to leave the college fund alone and not dip into it. Perhaps they should be reminded that their child will need money after graduation to set up an apartment, utilities, medical insurance, business attire, etc. Don’t we all wish that we could have had a helping hand when we left the nest to create our own nest?</p>
<p>It is very difficult for most people to save money, so the fact that they were able to save a lot for college is an admirable thing. Now that they apparently don’t need the savings for its intended purpose, I hope for their sake that they utilize their hard-earned savings productively.</p>
<p>Edit: I’m sounding a lot like my father. Oh, well…</p>
<p>In this economy do they also have 100% job security - I wouldn’t go blowing a big wad right now on anything. Also, financial aid pkgs can vary from yr to yr - especially if there is merit in there and the student doesn’t perform as expected</p>
<p>I’d say yes to the vacation, no to the mercedes. :)</p>
<p>After sending a kid off to college, the parents deserve a little vacation time with one another. The car seems like a luxury for someone who doesn’t have to ask about the wisdom of spending the money.</p>
<p>If the money was saved for the student, how about saving it for grad school?</p>
<p>I know we planned for college a bit different that other; we invested money in the children’s names. When it came time for college, we decided to borrow the money with student loans. In turn, the kids will receive their investment accounts when we decide they are ready. My son is in medical school, so my husband and son bought a house for my son to live in during medical school. We used money from son’s investment to purchase the home, and my son will hopefully make a nice profit on the house.</p>
<p>Not to pop the balloon, but many colleges do a bait and switch.
Lots of nice happy dollars to attract students freshman year- may be merit, may be grants for need at a school that doesn’t meet 100% of need. ( or even if they meet 100% of need- need may be met by * any* combination of workstudy, grants and loans- they could meet $30,000 of need, with $28,000 loans & $1,000 grant and $1,000 work study)</p>
<p>Sophomore year- that bag of donuts, turns into a unsubsidized Stafford loan of $3,000 and a hole where the funds used to be.</p>
<p>The college is spending their money on the * next[/] potential freshman class hoping that the continuing students will decide that transferring is a PITA and they will try to find their own money to pay the bills.</p>
<p>Expenses versus take home is meaningless. There are many high income people who have nothing in the bank and do things they can’t afford. You can’t give advice without an idea as to savings, liabilities, assets etc. For me , the opportunity to help with grad school and a secure independent retirement well on it’s way to being fully funded would be on a list of considerations ahead of a car that’s a depreciating asset. Have him talk to a financial advisor.</p>
<p>Spend, spend, spend. Money is worthless and you stir up the economy by spending. Especially if this is your mid-life crisis car. We only live once!</p>
<p>PS: I did the same thing this year, but not the same car.</p>
<p>If the money has been accumulated in a UGTMA-type account, the rules specify that it can only be used for the things that benefit the minor. And when the minor reaches a certain age, the parents may not have any control over how this money can be spent. So if that’s the case, a family vacation might qualify as an expense to benefit the kid, but a car for the parent will definitely not!</p>
<p>(I was at first puzzled what an “S430” mentioned in the OP was - LOL!)</p>
<p>Why not spend some of the money on themselves? They are the ones who earned it and deserve to reap the benefits of giving up things in the past (of course presuming it isn’t tied to the child legally). The savings are like an insurance policy for being able to send child to college, a windfall now as the money budgeted is not needed. Need to have some fun in life.</p>
<p>Concur with roshke that talking to a financial advisor is the right thing to do. If their retirement and emergency funds are in good shape, along with college funds for any younger kids, taking their employment, lifestyle etc etc etc into account, then it’s purely a personal preference decision how to spend any extra.</p>
<p>What about younger sibling? I’d wait to see if that money will be needed to fund the younger sib’s college education before I bought the sports car or remodeled the kitchen.</p>