Friday, March 16, 2012

Suggestions Needed

One of the things that both Kristian and I feel very strongly about is saving money in a college fund for Hunter. Kristian was very lucky that his parents paid for his education however I was forced to take out sizable student loans for mine that I'm still *cough*10 years later*cough* paying for and will continue to pay for for many years to come. I don't want my child/children having to start out their adult life in massive debt just to get an education.

We have some money from our tax return that we want to start his college fund with but we've been debating on the best kind of savings plan to setup for him. The 529 plans seem to be popular but I don't like the fact that if you take the money out for anything not education related it gets taxed (at least that's my understanding, I could be wrong). So I was thinking maybe a regular IRA would be better. I also would like something that will hopefully grow and earn money and not just sit in the bank not earning any kind of interest. Ideally we would like for him to go to college but if for some reason he chooses not to or *pleaseGod* gets a scholarship and doesn't need that money for his education I would like for him to be able to put it towards something else, like a down payment on a house without being penalized.

So my question is what's a good way to save for my child's college education? I want something that is easy to put money into, that doesn't have a minimum or maximum contribution limit and ideally wouldn't be taxed if used for something else.

How are you saving for or planning to save for your child's education?

9 comments:

Lexilooo said...

I don't have babies yet, but I will definitely help them as much as I can by saving! I can't help much in that regard, but I do have two godsons that I help a little bit with.

When I was born, my grandparents bought my cousins and I savings bonds. Each Christmas and birthday, we'd get a $50 bond. They bought them for $25, and they take seven years to mature, but they will keep maturing more than that too. Of course, it doesn't seem like too much, but by the time I went to college, the early ones were worth a few hundred dollars each! I know, it isn't much, but it did help. I'm doing that for my godsons, and will if I have more godchildren in the future, and my own children as well! Just a small idea!

Lexilooo said...

I don't have babies yet, but I will definitely help them as much as I can by saving! I can't help much in that regard, but I do have two godsons that I help a little bit with.

When I was born, my grandparents bought my cousins and I savings bonds. Each Christmas and birthday, we'd get a $50 bond. They bought them for $25, and they take seven years to mature, but they will keep maturing more than that too. Of course, it doesn't seem like too much, but by the time I went to college, the early ones were worth a few hundred dollars each! I know, it isn't much, but it did help. I'm doing that for my godsons, and will if I have more godchildren in the future, and my own children as well! Just a small idea!

Lexilooo said...

I don't have babies yet, but I will definitely help them as much as I can by saving! I can't help much in that regard, but I do have two godsons that I help a little bit with.

When I was born, my grandparents bought my cousins and I savings bonds. Each Christmas and birthday, we'd get a $50 bond. They bought them for $25, and they take seven years to mature, but they will keep maturing more than that too. Of course, it doesn't seem like too much, but by the time I went to college, the early ones were worth a few hundred dollars each! I know, it isn't much, but it did help. I'm doing that for my godsons, and will if I have more godchildren in the future, and my own children as well! Just a small idea!

Lexilooo said...

(soory, I didn't mean for that to post three times!)

Luck o' the Irish said...

IRA is not for education, only for retirement and there are penalties for withdrawing early or taking loans from an IRA. 529s are the way to go (See T. Rowe Price...they have good ones). Or, an ESA (education savings account), I think places like Scottrade offer that. Good luck!

Heather said...

I don't have kids yet, but have heard good things about the 529 plans from others who are currently doing it. It's really outrageous to think how expensive higher education has and will continue to become.

AmyJean {Relentless Bride / Fry, The Baby} said...

I have also heard things about 529 but haven't looked into it. let me know what you research and i'll do the same. BTW, i hope hunter feels better - it could be just reflux (spit up can make them congested, nose stuffed) or maybe just with the blossoms coming out a reaction perhaps? I hope he feels better either way. I'm sure its nothing to be too concerned with! :)

Meagan said...

We went with a 529. It can go towards housing, books, etc. Even if he goes somewhere close to home ans lives with you, you can take money out for his rent. We did the Charles Scwabb Kansas fund. It doens't matter what state they go to college in.

Meagan said...

We went with a 529. It can go towards housing, books, etc. Even if he goes somewhere close to home ans lives with you, you can take money out for his rent. We did the Charles Scwabb Kansas fund. It doens't matter what state they go to college in.