D.M. asks from Littleton, CO on March 01, 2010
D.W. answers from Indianapolis on March 01, 2010
We met with an accountant right after we got married, and he told us we were already behind the ball on saving for college/retirement.
We are able to afford to put $100/child (2 kids currently) into a 529 account each month. They've taken a hit with the down economy, but it's still the best way to save for college (or any structured post-high school education).
College was a HUGE priority of my parents when we were growing-up. We weren't allowed to have jobs during the week because our job was to be a student. It killed me to have to stay out of college my Sophomore year for no other reason than money. I worked 3 jobs, saved $17K and went back to school the following year. I had to pay all my living expenses (including books). I was a much better student when my own money was paying for it vs. my parents footing the bill because I appreciated it more.
Moral of the story: save what you can and make them contribute to it as much as they can.
Your best bet - get a good financial planner who can guide you in the right direction. There are many different options for planning, and they all carry different risks/penalties if not used for the intended purpose. Most financial planners make commission off the value of your portfolio. You shouldn't go with anyone who makes you pay a fee.
A.R. answers from Boise on March 02, 2010
We meet with our financial planner when we had our first about 4 years ago and he told us its about 300/month per child, or about 32,000 into a college savings fund the moment the child is born. Bottom line, save what you can!
J.V. answers from Chicago on March 01, 2010
There are calculators you can do to figure out how much you need to set aside. However, if I was you, I wouldn't bother. I did a calculator and was shocked by how much money was recommended per month --think closer to 1k than 100! There is just no way to save "enough" while worrying about retirement and everything else, unless your household income is a lot, like top 1%
We save about 120 per kid a month in a 529, with the goal of 300 per kid. My parents also contribute about 600 a year, so about 2k a year goes into each account. That still isn't enough, but it's a good enough start, and they can foot the bill for the rest.
J.P. answers from Boise on March 02, 2010
I spoke with a financial planner last month that actually didn't recommend using a 529. Mainly because you HAVE to use it for education, what if they get a scholarship, or go to a cheaper school? He suggested a separate account, earmarked for school, and if they don't need it, how about a vacation? :)
Also, you may want to read the Dave Ramsey book Total Money Makeover. I don't remember it word for word, but he also didn't believe in 529's and thought that other savings was more important than the college savings.