FABULESSLY FRUGAL FRIDAY: Saving for Your Children’s College Educations

I am doing a lot of research on College Tuition Savings Programs in preparation for my Fab Frugal Friday post next week. The desire to research these programs was brought on after participating in THIS thread in the Frugal Living Community.

I'm a Frugal Living MemberGranted my children are only 4 and 6, but I believe starting now is key. And as I have researched ways to save, that point has been hammered home. I was expecting that. What I wasn’t expecting was the difference of expert opinions on 529 plans. Since that was our initial plan, I’m freaking out a bit now.

I’ll bring you all of that research next Friday, but for now I want to know what you have done, what you are doing, what you plan on doing or what you wish you would have done in regards to saving for your children’s college educations.

You can either hop on over to the Frugal Living Community on Blog Frog and join the discussion there, or leave a comment right here. Then check back next Friday when I have compiled all of your tips right here in my Fab Frugal Friday post!

Comments

  • Jamie

    I use upromise.com to save. You can get a percentage back on purchases made online, at restaurants, and on grocery items. It’s not a big percent but it adds up fast, especially if you have a big purchase like a house. I have been trying to decide where to move my savings to and I was thinking 529 plan so I’m anxiously awaiting your post next Friday!

  • Meghan

    Do you ever listen to Clark Howard? He’s a money saving guru from Atlanta on 750 WSB. He’s the expert in the 529 plans. Check his website… http://www.clarkhoward.com

    If I remember correctly Utah has the best plan and you don’t have to live in or go to school in Utah to use it.

  • Mavis

    My daughter wants to attend college in Europe so the 529 plan doesn’t work for us. I want my kids to not only get a great education but to also be able to go to school where they want to (as long as they have awesome grades) and not be tied down to having to attend college in 1 particular state. I don’t like the idea of being “locked in” to one program or another with a bunch of guidelines… it freaks me out.

  • Sophie

    We have a mutual fund for my son. We will probably have more than he needs for college (we started it when he was a baby), and this way he can just have whatever is left over when he is done or if he decides not to go to college and do something else he can have it all and have a good start in life. You never know what path your children will follow!. Also, if something were to ever happen to us and we were to need to the money, we could use it without penalty. That is why we chose a mutual fund, not a 529 or similar fund.

  • Teresa

    Another option recommended by many financial specialists is to contribute (or start if you don’t have one) to your own ROTH IRA. With a few guidelines, you can use the money to send your kids to college or if they receive scholarships or decide not to go, then you have money already built up for retirement.

  • Michele

    My husband and I have put a lot of research into this topic. We are both uber-planners. I am accountant and he is an Engineer…it’s in our blood. Our children are 2 & 5.

    We live in WA state so we chose to participate in WA’s 529 plan. It’s a Guaranteed Tuition plan. You buy tuition now at todays rate. The rate being what tuition costs at both WA university’s (Washington State University & University of Washington) today…which currently is $117/unit.

    You DO NOT have to use the tuition in WA. You can use it anywhere…I mean anywhere…diesel mechanic school & hair design school qualify as well…anywhere in the country. However, shall your child choose to attend Harvard, they’ll have to come up with the difference in tuition between what Harvard costs and what tuition costs in Washington State.

    You can purchase up to 500 units which is equivallent to 4 yrs of school plus $$$ for books & room & board. They just have to be “Qualified” educational expenses.

    If you live in IDAHO, and have a relative or trusted friend that lives in WA, you can have them open an account for your child and then transfer ownership of the account to you right away. We are doing this for our ID resident nephews. The value of WA tuition will most likely always be more than ID universities, so your child will have more than enough.

    We chose this plan because it is “Guaranteed.” You buy tuition today and you’re done. It is different than other 529 plans that are a savings account where you bank on earning interest…subject to the VOLITILITY of the market, and hope that the rate of return earned on interest is enough to cover the skyrocketing rates of tuition. Too much of a gamble for us. Tuition in WA state has increased an average of 8.5% and 13% just in the last 2 years alone.

    One last thing to consider, which I thought was cool…family members & friends can contribute to your childs WA state tuition account as a gift. I have friends that do this as Christmas & Birthday presents.

    If anyone wants more info, check out their site at http://www.get.wa.gov
    Michele

  • Christi

    We have 529 college saving plans for both our daughters (ages almost 8 and barely 4). We make automatic monthly contributions. Why we chose 529 College Savings accounts.

    1) They don’t effect financial aid eligibility. The accounts are in the my name not the girls.

    2) I can change the beneficary to any blood relatives, so if my children don’t use all the funds or don’t go to college, I can name a neice, nephew or cousin.

    3) Use of funds are not limited to only undergraduate public schools in a single state. The value in an account can be withdrawn and used for any qualified educational expense at any public or private college anywhere in the world.

    4) Accounts can continue to earn returns even when the benificary is in college.

    Oldest is a beneficarry on a Fidelity 529. Like it because it has an optional credit card linked to the account. Anyone can apply for a card and a percentage of their purchases are credit to her account quarterly. My sister and 5 friends went to a wedding in India (that’s not a typo, I mean the country in Asia) and all the travel expenses were put on her card that was linked to my daughter’s 529. I estimate that 1/2 the contributions have been credit card contributions. Down side is that is not sponsored by my state so I don’t have any current tax benifits.

    Youngest has a Idaho Ideal 529. Doesn’t have the credit card option, but can be linked to a Upromise account. As an Idaho resident we get a tax break.

    We have a UPromise account, but after almost 4 years, I’ve yet to reach the $25 level to transfer to her 529. Upromise is a great idea. But for me it seems to be another excuse to spend money and my objective in live is to spend as little as possible. Most of the grocery rewards are linked to name brand products (like Eggland or Huggies). I typically buy the store brand. The few cents I get as a reward is almost never as good as the many cents I save with the store brand. Even the online retailer that participate don’t add up to much. You have to buy a lot of stuff from LL Bean to reach $25. For us, Upromise is a nice little extra, but that’s about it.

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