I feel like I'm one of the few here who don't have a 529 for their LO, or a savings that I contribute to often. The only savings our girls have are from gifts from grandparents, which isn't more than a few hundred. I guess we just aren't to the point of being able to do this for our kids right now. I'm more concerned about our own retirement!
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We are right there with you! Our kids only have savings accounts that we've put money they've been given into. It's not much either.
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We don't have accounts for the kids. We're paying our bills, saving for retirement, and saving in general. Nothing earmarked for them except their birthday gifts.
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I agree with you that the best gift you can give your children is your own financial independence (retirement savings).
We have worked very hard to both increase our income and decrease our expenses so that we can both save for retirement (first) and pay for her college (second). I was really overwhelmed by my student loans and don't want her to have to go through that. While it did teach me a lot about money, I'd rather her learn in ways other than dealing with mountains of debt.
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Retirement is the priority right now! My parents are contributing to a 529 plan though. Hopefully college will be free in 18 years!!!
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Us. We're putting so much into childcare, there's nothing left. We have a 529 but also only have gifts in there right now. We both do contribute to our 401K though because it's pre-tax (and matched) so silly not to.
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@Bao: my kids do have money in the bank from birthdays and baptisms and older generation's leaving money upon death - however, your retirement should be priority right now!! You are doing fine
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You're smart to focus on your own savings and retirement. Your kids can take out loans for college, but you can't take out loans for retirement!
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We have a college fund for DD, but there's a lot of upheaval with our state's program right now and we're not actually allowed to contribute to it right now. I don't know what's going to end up happening with it, they may convert them to 529s but it's all up in the air. We don't have another account specifically designated for her, but we do save (both retirement and general savings) -- it just doesn't matter if the account we pull the money from if/when we need it has her name on it or not. When she's a little older, we'll open an account together, I remember doing that with my parents when I was young and it was exciting. But we probably won't put a lot of money in it, since it will be for her to "manage" herself.
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We were saving for a bit in their 529s but since we bought a new house and with two in full time preschool (tuition is $3000/month for both. Seriously it's like a second mortgage) we stopped. Once the kids are out of preschool we'll put most of their former preschool payments into their 529s. So it'll be a couple more years before we start back up.
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I tell clients (financial planner) that there are two ways of thinking about it:
(1) You can't borrow for retirement, so plan accordingly.
(2) In football you should hit the first person coming at you. This means that you should address debt, college, then retirement (in that order).
All this to say, not even the "experts" can tell you what you should be doing. I jokingly say to clients all the time that I can do beautiful spreadsheet for them concerning anything they would like to see, but that, it seems, life doesn't usually fit into my perfect little spreadsheets. Just select what you want to focus on and do that!
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We opened accounts with $500 and that's all we personally have set aside for them. We put monetary presents in their accounts so they have a bit in there. We are lucky though because my dad has set up and funds their 529's. Not sure what we'd do if he didn't because money is pretty tight for us.
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We have 529s for the kids, but we're not putting very much into them. Definitely saving for our retirement more!
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@LBee: So one way we are kinda combating this is by using the Roth IRA for saving right now. Ideally that will be used for retirement but if needed, its my understanding it can be used for educational expenses without penalties. So we are planning for the big thing retirement but if we do get "hit" by the big need for college first, we can look at using the money.
Hopefully once they are out of daycare and we are able to save a bit more we can look at separating the two but for now and the small amount we are able to put aside it seemed like a good compromise for us. Again, key just just be saving!
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We are not aggressively saving by any means. I have a group savings plan for L, I have no idea what the boys mother has done for them (I have an idea though: nothing), so I have been putting a little bit away for them as well. But... it's definitely no where that I want it to be. We are just spread thin already...
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@T.H.O.U.: I had just added that as an ETA and then felt like I was potentially giving way too much (unsolicited) feedback!
ETA: It works with any IRA - Roth, Traditional, or Simple!
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Planning for ourselves, I think, is more important. I also hope to help them get the best education, which is why we live where we live.
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We don't have a separate account for DD either. We are just trying to save in general.
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Yeah, same here. I've been in school for the last two years, and we can't live on just DH's income without accruing debt. We have his student loans and mine to pay off, and a little bit of cc debt. So it's not a priority. My son has his needs met and I really don't feel bad if he needs to take out some loans for college someday. That's still almost 15 years down the road!
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We have 529s for both girls, but right now only grandparents are contributing to it. we are working really hard on paying stuff off so we can get a bigger house, and our in laws save quite a bit for them so we don't feel as bad hopefully soon we can contribute more.
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we don't.... I wanted to but hubby really wants her to pay for her own education-- by working or getting student loans if she's not able to get scholarships or grants. We'll help as we can but won't totally foot the bill.
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I put in $50-100/month and try to squirrel away a bit from the tax refund (usually $500-$1k), so he has a little in there, but I don't think that's aggressive. It certainly won't cover 4 years of higher education. I would love to pay for all of his education, but the reality is, I won't be able to. I'm hoping that some combination of his 529 and helping while he's in school (which theoretically should be easier without daycare payments and hopefully in 15 years, DH and I will have higher salaries), we will be able to ease some of the burden.
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We are probably not going to pay for LO's college education. We live in an area that has so many great colleges ranging from state to private. I am going to encourage our kids to go to junior college first and get as many pre-reqs out of the way before transferring. I'm hoping they will choose to live at home, at least for a little while, to save money. If not, we will help where we can but we are not going to give them a free ride.
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We are not saving for college either. We are choosing to save for retirement now and hopefully when the littles are out of daycare we will be able to squirrel away some money for college. Both of us paid our own way through grants in undergrad (my parents paid the last $800, he had no overage) and loans for grad school that are already paid off. It won't be the end of the world if they pay their own way and we will encourage them to choose in-state schools as long as the programs they want are there.
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We don't! My parents have hinted about paying for college so I will know in 3 years when my nephew goes what their plan is. For now we are saving for retirement!
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Us! We are paying off our own student loans, along with putting some into 401k (not as much as I would like). Plus other expenses. We don't have the means right now to put anything into a 529 :-/. Maybe one day
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@LBee: I'm legit scared to rerun some of my clients' financial plans when I get back from maternity leave after what the market has done YTD..... Damn life not fitting into my perfect calculations
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@Truth Bombs: Ha! I was talking with a client today about how the notorious Black Monday was a 500 point drop (what we pretty much had on Tuesday) and the role perspective / percentages play.
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Same boat! T has an account but his grandparents are the only ones gifting into it. Haha.
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DS has a savings account with $75 because we got a check made out to him, but that's all we have so far. We'd like to start savings for kids' college so we can help them out, but we also need to save for retirement and to buy a house.
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We are saving for LO but it's a pretty small amount. If you look at the amount we are putting towards our own retirement, we only put like 5% of that into LO's accounts each year (plus whatever gifts from family that we get for her). We started saving for retirement late plus I still have a lot of student loans, so saving for LO isn't our priority right now.
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They both have savings accounts, but we don't contribute regularly. It's mainly gifts received from family and friends, and we're lucky that they are so generous.
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LO doesn't have a savings account yet.
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Only saving a little each month for college. When I go back to work I'll aggressively pay off my student loans, and then that money will go for college each month.
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I'm no financial advisor, but I feel like taking care of you first is the smartest. We don't have a 529 for the kids, but we do have a regular savings account we contribute to regularly. We don't really understand what a 529 is exactly, but our tax preparer (who is really knowledgable about investing) actually recommended we do a Roth IRA instead, which we don't really understand either so we haven't done anything with the savings yet.
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@Bao: we don't. We will keep saving monthly to our general savings and our RRSP, and we will help LOs with what we can when university comes around. We have no intention of paying for all of their schooling.
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@Bao: we dont! We're a one income family living mostly paycheck to paycheck (we have extra just not much and we need it for emergencies.) The way I see it is we're doing better than my parents were at this point in their lives. They never saved for us (at least not until we were much older). They helped in other ways like giving us a lump sum when we graduated high school/paying for college classes/letting us live with then as long as we needed. It all worked out fine.
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We're doing private school preK-12 so we're focusing on that and our retirement first. We do plan on paying for their college educations, but they can take out loans if we are not able to pay for all of it.
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We are saving aggressively for a house ... Then retirement. I put $5 a week into LO's bank account. Once we buy a house, I'll contribute $90/week, and additional into a savings plan for her. Not super on my radar right now.
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Once I stop paying for their daycare I'll re-asses. I kind of feel I should be putting some away right now to maximize the government matching amounts but obviously not strong enough to do anything about it
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