College Fund

My wife and I have for a while been discussing how we are going to start the chipmunk’s college fund.  We knew all along where the money for his fund was coming from.   We were treating the tax refund that we get for him as his money.   The only exception is that he is not able to touch that money until he is in college or graduated.   Tuition rates continue to rise and its difficult to think about what they will be like once the chipmunk is ready for college.  You want to have some sort of plan in place though to help them if you can.

We had been going through a few options like a trust, savings, or a 529 plan.  We don’t really like any of those options for one reason or another.   We didn’t like the trust because as soon as he turned 18 that money is his and we would have no control over where that money went.  Savings doesn’t give us much of a return in the end but is safe.  The 529 plans we didn’t’ like because if he ended up being a super genius (not likely if he got any of my genes) and got a ton of scholarships then that money is well a waste since you can only use that money for education expenses.

We want to be able to provide for our child and give him the education that he needs.  This is something that I’m sure alot of parents think about and have many questions about.  What are some of the things that you have done to help with college expenses when that time comes?

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3 Comments

  1. Avatar oneofthosememories March 19, 2011 at 11:01 AM

    Up here in Ontario we have Registered Education Saving Plans. They are Plans that you can open with your financial advisor, you can use any investment you chose so stocks, bonds, mutual funds or a combination of the above. They are tax sheltered. The nice part is the government matches your contributions anywhere from a guaranteed 10% to 30% depending on your income. We started one right away when Adam was born. We do a monthly deposit (automatic withdrawal) from the bank and at anytime we can put a lump sum into it like a tax refund or gift. I think it’s a great system and we’re happy we’ve started putting money away already. The small amounts add up very quickly.

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  2. Avatar thelifeofjamie March 19, 2011 at 7:14 PM

    we have college accounts for both of our kids. 50 or 100 a month goes into their accounts and it is gambled with, I mean invested by the guy who does our 401k’s and other crap like that. We lost a ton of our son’s when the market crashed 3 years ago, but it has rebounded nicely and our daughter’s has almost as much as our son. My dad and my in-laws contribute to their accounts on their birthdays too. When we get a will, we are setting it up so that our money will go to the kids when they turn 25. We don’t want young dumb 18 year olds having the money. Other than that, their college accounts are for college, their inheritance is for when they are 25. Aim to get at least a 1000 a year into his account. By the time he is in college, he’ll have 18 + grand to use. And if he gets a scholarship, he has a down payment for a house when he is older.

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