Saving Money for College

Updated on June 30, 2010
Y.W. asks from Clermont, FL
13 answers

We are finally ready to start saving money for college for my 18 month old, but there is so much information out there and it's so confusing. I've gone through several websites and plans and it is just too much information. I'm wondering if anyone has used a financial planner and if this is the best way to go for us?

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answers from Tampa on

As a single Mom I did not have the opportunity to save for my girls college but I do know from their friends that were in college the 100% pre-paid plan you can get through the school seems to be the best. It didn't matter that prices went up they honor it. You do not pay the difference. I wish I could have done this for my girls but with the help of my wonderful husband and them working as RA's they both made it through with double majors. I would talk to the colleges and the local high school.

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answers from Pittsburgh on

Our financial planner used to work for Edward Jones but switched agnecies because there were certain products they were not ALLOWED (??!!) to sell to clients. We opened a 529 Plan and are satisfied. Most mutual funds are tanking right now, bet keep in mind that this is a long term investment...don't scrutinize it every month or you'll go insane!
I'd find a financial planner that someone you know & trust is happy with and trusts.

p.s. You can open a 529 plan from ANY state---just go for the O. with the best benefits!

1 mom found this helpful


answers from Chicago on

using a financial planner is the best way to lose money. Seriously, if you aren't truly wealthy, you win the investment game by not paying others fees on your investments.

Check into saving plans offered by your state. You even get a tax break,



answers from Raleigh on

I have a wonderful financial planner through Edward Jones. When we opened a college savings plan, she showed me all of the options and helped us compare them. We have been very happy with the services we have gotten so far.



answers from Miami on

I feel for you. I did the Fla Prepaid for my son in 2006. The plan has changed so I can't do the Fla Prepaid for my daughter. Because Fla Schools have gone way up, they have what's called a tuition differential. So you're plan will be double. It used to be that the prepaid plan was good because you locked in the rate at that price; but you can only do that with tuition differential. So it's like having two plans. We just couldn't do it and now I'm not happy. I was reading the other day that they want people who have older plans to add the differential but I thought we were locked in because this differential started a year later.

I have started two 529 plans and Suzie Ormand reccommends those and she also reccommends community college if you can't afford the big ones.

Like everything else education is so inflated and no one is going to be able to attend. Plus, so many people are out of work. When I graduated from college, the economy was what it is now and It was hard to find a job.

The Fla Prepaid will try and scare you by throwing what tuition will cost 18 years from now. Who knows what our children will want to do then. My hubby and I are trying very hard to stay affloat.

I would go to Suze Ormand's sight. She is the most rational and doesn't try to sell you a bill of goods. She tells you like it is and what you can afford.



answers from Miami on

Dear Y. -

In full disclosure - I am a financial planner in Ft. Lauderdale. I do not recommend to any clients that you use a college savings plan when you only have one child. While you may plan for that child to go to college - things happen and children may not choose to follow the path you might wish for them. I don't ever recommend putting all of your eggs in one basket.

If you do any of the "college savings" plans - whether you do a Florida Pre-Paid investment plan or guaranteed plan or a 529 plan - there are are pretty stiff consequences if you do not use the money for educational expenses later.

Just so you know, I am not telling you to do nothing - just saying that I don't recommend a "college savings" plan per the IRS if you only have one child. My husband and I have been saving for my son's college education (we are now pregnant with #2 but we have a 4.5 year old) through a regular investment account in our names jointly. That way if he decided to join the military, travel the world or just decide that he is not college material we would not be penalized. I do recommend various plans for people with more than one child. After #2 arrives, I plan to open a 529 plan with my son as the first beneficiary and #2 as the contingent.

I would be happy to answer whatever questions you might have.

Best wishes,



answers from Boston on

I think you should seek out a financial planner. They often can suggest ways to save that you might not think of, as well as exactly what you should be saving for. (For example, its much more important to have a good life insurance policy than a lot in savings for college and there are ways to make a life insurance policy "work for you" in terms of saving). Good luck.



answers from Tampa on

We live in FL also and decided to do the easiest thing (we don't have a financial planner) which was the Florida Prepaid College Fund for our two children. There are quite a few options to choose from and you can also choose how many years you want to pay (either all upfront, 5 years or until the child attends college). You should go on the website and read everything, there is also a customer service number to call with any questions you may have since it is a lot of information to take in and understand. Here is the link:



answers from Orlando on

The State of Florida has a prepaid college program that we joined in 2005. They will send you the info. w/ all the options. We opted for locking in a four year state college tuition plan. His college will be paid for to a four year institution in the Stae of Florida by the time he turns 18.. He can go out of state, but the money only covers what it would cost to stay in state. You can do a two year plan too and can add on room/board/books, etc.We pay about $95/month. Google "florida prepaid college plan" and check it out. I felt it was self explanatory, and didn't need use of an advisor.



answers from Chicago on

My husband & I took a Dave Ramsey class. This class talked about all aspects of finances such as saving for retirement, dealing with credit card debt, life insurance, buying a home, paying off a home, homeowners insurance, saving for college, etc. There is so much to know about money, since that's what makes the world go round, I highly recommend taking the class, it's way way cheaper than going to a financial planner (only $99). Although I believe seeking a financial planner is very important. But I also think having a good sense of "money" before you see a financial planner is extremely important so you can go in with an idea of your wants & needs.



answers from Tampa on

What we do is use an Education IRA to save $2,000 a year and supplement that with a 529 plan (we are invested in Utah's plan--you don't have to use the Florida 529 plan, particularly because there are no tax benefits to contributing to it--choose any state and the money can be applied to any school). The web site (I think) offers comparisons of all the 529 plans. I like the Money Magazine site for information about college savings.

My overall recommendation is to get going and make it a monthly deduction from your paycheck.


answers from Chicago on

Hi Y., thanks for that question. I also want to open a college fund for my 3 year old son, and I'm not sure what would be the best way to go. So if there are moms that can help, I would really appreciate it.


answers from Dallas on

There are SO many websites and information overload. I strongly suggest speaking to a professional to figure out what is best for your family. You need to educate yourself. Not ALL financial planners are bad. You stand to lose a lot more if you are not educated on the process and tax implications.

We have a 529 plan now through our advisor at Edward Jones. When we determine that we want to invest in something our advisor does not "sell" we do it on our own. You do not have to have a planner to invest in solid funds. My husband is very much a numbers man, he has his MBA from Duke but we still elected to go through a planner. We feel it is better to keep the emotion ( up and down swings of the fund) out of the picture. We learned this during the first stock market crash when we lost a lot of money. Thankfully, we have built it back but it has been better emotionally going through our planner.

We started the college fund as soon as she was born and we put in $10,000 per yr by her birthday in Dec each year. She will be 16 this year and everything looks pretty good. Some years when we were more fortunate, we put in more and when the stock market dropped and the 529 lagged, we added the difference plus some to keep it funded properly.

That is our goal, I know everyone does not have the same goals so you have to figure out what works best for your family. Any amount in the college fund is what you can.

It is great that you are starting this. Our personal opinion is that one of our obligations as her parents are to get her out of college debt free. I'm not saying let her sit on her rear and do nothing, although I don't have that type of child, I'm just saying wheh she goes out on her own, she starts debt free. Also keep in mind that you need to make sure you are fully funded for retirement.

Keep up your good work.

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