How are you saving for your kids education, if at all

<p>There has been some good exchange going on this subject on a different thread, so I thought to start a very specific one on this subject.
How, if at all, are you saving for your kids education?
My spouse's and mine parents did not pay for our education . We worked our way through grad schools. But we both feel that it is our obligation to give our kids the best education possible. And pay for each as much as we are able to.
Instead of investing in education plans we purchased two real estate properties (one for each kid) that we plan to sell when they graduate from HS.
The monies will go towards tuition (after some careful tax decision).
What are you guys doing?</p>

<p>Wow, that is a novel approach. How old are your kids? 2 years ago everyone would proclaim you a financial genius, but now everyone is going to ask you what you will do if the properties decline in value. </p>

<p>Quite honestly when our kids were young most of their savings/investments came from generous grandparents. In the years leading up to college I made annual chunky contributions to 529 plans. We now have undergraduate expenses pretty much covered, which takes a lot of pressure off me since I am not working.</p>

<p>We have some savings for the first year. I am currently looking for fulltime work after many years of no/parttime work. We'll hopefully stay a year ahead of things. Wish we'd saved more through the years, but I never planned to stay home with the kids ... it was something we decided after the first was born. I've never regretted it, but it certainly wasn't the best move, financially. Fortunately, we have always lived within our means.</p>

<p>When each of my two babies was 2 weeks old (20.5 and almost 18 years ago respectively), I started having money automatically deducted from my paycheck for US Savings Bonds, as a way of never having had the $ in my hand to begin with. (I stopped that by the time they were about 10, since the Bonds program changed, but the bonds they already had kept earning interest.) We set up an "in trust for" account for each of them and whenever my husband or I got a bonus at work, we split it in two and put half into each account. My parents once made a small contribution to each, but that was it. We opened 529s for them about 5 years ago, and made annual contributions to each. The stock market did well in the past 5 years, so that's helped.</p>

<p>S#1 is covered for undergrad, and S#2 is going to have a major chunk of change left over from his accounts, assuming he keeps his merit scholarship for all 4 years of undergrad. (He'll be spending down the 529 first.) The savings bonds from 20 years ago all reached face value and kept earning interest after that; I try to give a Savings Bond to new babies along with a more immediate practical gift. Anyway, that's what we did: started early, saved little bits regularly and bigger chunks when they were offered to us at work before we had the money in-hand to look at and possibly be temped to do something else with, and started 529s when we could.</p>

<p>We tried a half dozen ways to save for college expenses. The only one that went to plan was learning to live well within our means. And yes, I mean that in both senses ("live well" "well within"). Oh, I nearly forgot. When each kid was a HS freshmen we made clear that we would pay for state U only. If they wanted other options they needed grades that would attract scholarships!</p>

<p>For our 2 sons...savings bonds from birth, mutual funds and state schools only for us too.</p>

<p>Ditto NewHope33--living within our means! Which has meant--a comfortable home, not our dream home, no car for son when he turned 16 (he couldn't take one to college freshman year anyway and it would have just been idle in the driveway most of the year), and limited vacations. Also, we have only bought a new car every 10 years or so! The biggest factor in saving however, was that we started saving as soon as he was born. All my son has heard his entire life from hubby has been that any "extra" money had to go into the college fund. But, I will tell you that college is paid for! Unfortunately, all of this saving meant no financial aid from any colleges when he applied. We worked very hard at saving for his education and I feel as though we were penalized in the end! (But, that is another thread!!)</p>

<p>PS-no regrets tho, no one can ever take away that diploma and education. The material things are minor compared to the education!</p>

<p>Company stock plans and stock options, invested in a variety of things including company stock, index funds and some bonds. I also worked for an employee-owned company for a while that did an IPO with good results.</p>

<p>We saved through a 529 plan. It's kind of a pain now because tuition is free, and we have to do a bunch of paperwork for the "room and board" expenses. It's getting hard because oldest is moving into a house and will no longer be on the 'food plan'. Yuck. It's frustrating to have to worry about paperwork to get to your own money.</p>

<p>I've worked part time (self employed) and have been ratcheting up my hours and taking more jobs. With any luck I'll be earning a college tuition this year. But mostly college is being paid by an inheritance. We do live pretty modestly and we lucked out with the timing of our last house purchase.</p>

<p>I work. ( 10 chars)</p>

<p>We can't count on inheritance, we are actually somehow helping our parents, sponsoring their trips to see us, etc.
I know, the housing bubble... Our kids are 5th and 7th grade and we do live in an area that has started to appreciate only 3 years ago (the fastest growing housing market right now is here). But you never know...
I am working minimal part time since my second was born and am also counting on working more when they become more independent. I can triple my income if necessary - or close to. This is also something I am kind of looking into. If I work full time I can cover tuition, books, food and room easily for one child in a private college. But things do change...
We are also very frugal. Camping trips for summer vacations, old cars, etc. We do have a nice, close to 5000 square feet house on a nice acerage, with losts of tree for kids to play with , but it has been our very, very good investement. Don't they say "drive inexpensive cars but own the best house you can afford" ?
We do not have enough left to maximize our retirement plans, but we are saving about 10%.</p>

<p>Inheritance here too...we could easily pay for in state public. With the tailwind we got from my dad we can go private as well, although it will be a squeaker. I have no problem asking the kids to take loans of up to 10K total if they opt for private.</p>

<p>Started college fund when kids were infants. Grandparents contributed generously as well in lieu of Xmas and BDay presents. They will have enough for anywhere they want to go (actually DD opted out of a college education so we have extra to spare for DS).</p>

<p>We have a 529 plan and a UGMA for each of them. I'm also earmarking most of my part-time earnings for tuition while they are in school. We currently have saved enough for them to go to a state school without taking on any debt, but my oldest definitely wants to go out of state, and my youngest probably will too. Anything above and beyond a certain predetermined dollar amount will be their responsibility, in student loans, scholarships, summer jobs, etc.</p>

<p>When S was born, I "earmarked" an IRA I had recently rolled over from previous job as his college fund. With expected appreciation, that investment should have (and did) cover college tuition wherever he might want to go (he's a rising college junior now). Meanwhile, we decided to pay for DH's grandson's college as well (state school), which changed our plans a bit. I am working four years beyond planned retirement. We are somewhat older parents and had always planned early retirement from intense careers. DH is already retired but has willingly returned to modestly paying seasonal work from time to time.</p>

<p>Because we earmarked an IRA for college, instead of retirement, and wanted to fund step-grandS's college as well, we have been charter members of NewHope's Live Well Within club. Savings comes first; used cars are fine, thank you very much; no cars for the kiddo, no consumer debt, yada yada yada.</p>

<p>When the grandchildren were in preschool, my in-laws set up a 10K UGMA
account for each of them. They wanted their grandkids to know that everyone in the family expected them to go to college. Thanks to the
stock market bubble, and getting out in time, that original investment has grown nicely.</p>

<p>Also, when S1 was 3, we got a 15 year mortgage at a good interest rate.
That will free up a nice stream of cash at just the right time.</p>

<p>We also gave S1 a brokerage account with several thousand in it when he
was 15. We said "Manage it well, there's your college spending money."
Just doing research on companies, and making trades has been an economic
and emotional education for him.</p>

<p>UGMA and 529 plan funds. We have been very fortunate and paying for college for 2 kids will not put a major strain on our finances. Our new goal is to pay for undergrad without touching the UGMA funds so they will have money for grad school or other expenses in the future.</p>

<p>favorite subject - money.</p>

<p>We did not save any thing specifically for eduction. As a matter of fact, we are in the spend down mode. Our goal is to spend every penny of our saving down to a bare minimum except an emergency fund. </p>

<p>Why save? The more you save, the more you have to pay. I am willing to pay whatever my current salary could afford. Why do I want to sacrify my living standard so I could pay more for college?</p>

<p>you may want to re-think the UGMA Oregonian--it counts heavily against you in the financial need formula.</p>