March 21, 2012
Save-for-college

How a Young Family can Save for College

I have two children, a 2 year-old and 3 month-old, so why am I already thinking about college you may ask. After all, I’m still 16 years away from my daughter stepping through the doors of higher education. I’ll tell you why.

A highly competitive and educated workforce.

Colorado is one of the most competitive and educated workforces in the United States. Meaning if you are going to be marketable, you will need a degree. That statement is true today and will ring more true in the years to come.

The real reason I am starting to save, is just like all parents, I want my children to have it better than I did. I want my children to be more successful than I am, and I want them to do it with little loan assistance, if any.

I don’t want my children to graduate with debt.

As a young child my parents always told my brothers and me, “If you want to go to college, no matter what, we will find a way to pay for it.” Like most families we paid for it through blood, sweat, tears, and LOANS!

This is the same philosophy I have for my children; however, I want to do everything possible so my children do not graduate with debt. So prior to my children being born I opened up a 529 investment plan through CollegeInvest. (No, I am not an expert on 529 plans or a CollegeInvest employee , but I do know that this was and is the best option for my family.) I currently pay $50 monthly into two accounts (one for each child) and have been doing so for a few years now. Similar to a 401k, I can select my investment options.

529 plans are tax-deductible.

My favorite part about 529 plans is they are tax-deductible on your state income taxes. Plus, multiple people can pay into it. For example, no matter how old a child is, some people just like to give a card and money. My wife and I have asked those individuals to donate to our 529 plans. It’s a great gift and the money isn’t blown on candy.

How did I get started?

Even though I work in higher education, I too needed a realization (a slap in the face) that the cost of tuition may be (please feel free to replace the word ‘may’ with ‘will’) unreasonable and out of reach by the time my children are ready to go to college. Even before my first child was born I attended an informational session on financial aid. There I learned of multiple avenues for paying for college, and met with a representative of CollegeInvest.

What if my children don’t want to go to college?

Besides the cost of tuition, this is one of my concerns. My initial thought is, “Tough, you’re going.” However, I want my children to make the decision to attend college on their own and I will support them in all their endeavors.

Currently at home, I am fostering an atmosphere highlighting the importance of education, and I hope that this will motivate them to pursue higher education.

 

What other ideas do you have to save for college?

About the author:

Ryan McCoy has a passion for all matters of education. He teaches communication at Front Range Community College and has the mission as a fundraiser with the college Foundation to get the community to invest in education.

Comments:

March 21, 2012 Hannah

529 plans are a great option! I started one for myself before I had a child and just transferred it to my 6 month old son since I’m not planning to go back for a while. A cool thing is that if you start a plan for yourself but end up not having children of your own or don’t go to school yourself, you can make the beneficiary another family member like a niece or nephew!

March 21, 2012 deb McCoy

What happens to your investment if your child decides not to attend college? This information has been helpful, I appreciate your concern and willingness to inform others.

March 25, 2012 Michaele Charles

Great article, Ryan. Like you, we fear what college may cost when our kids are “of age” but I think a 529 plan is the way to go right now. Hopefully the diligence will pay off when our little ones grow up!