Moxie Posted April 6, 2015 Share Posted April 6, 2015 Our current plan is to pay off our student loans and cash flow college for our two oldest and save for the younger 3 to go to college. Our state has a $1000 tax credit for every $4000 you invest in college funds (if I'm understanding correctly) so we plan on investing 4k in college funds this year. Do we put it in the 14yo account or the 3yo account or one of the ones in between?? Quote Link to comment Share on other sites More sharing options...
Crimson Wife Posted April 6, 2015 Share Posted April 6, 2015 Will your kids get upset if you don't divide it equally? My older two kids currently have college savings accounts while my youngest child doesn't. The reason for that is we're not sure that DD2 will be able to attend college with her multiple disabilities. With her being the youngest, we didn't want to lock up $$$ specifically for college and not be able to switch it to a different beneficiary. But now with the new ABLE Act accounts that the Feds just created, we're going to look into funding one to the same extent that the older kids' college accounts are funded. Quote Link to comment Share on other sites More sharing options...
5of5 Posted April 6, 2015 Share Posted April 6, 2015 Our state allows you to set up separate funds for each child. Quote Link to comment Share on other sites More sharing options...
VeganCupcake Posted April 6, 2015 Share Posted April 6, 2015 Our state allows for separate funds for each child, but the beneficiary can easily be changed later if one child chooses not to use all of his/her funds. I think I'd probably put proportionally more in the oldest child's fund, but still some in each of the other children's in your circumstance. 1 Quote Link to comment Share on other sites More sharing options...
maize Posted April 6, 2015 Share Posted April 6, 2015 The beneficiary can be changed, but only one child can be a beneficiary at a time (at least that is how our state plan works)--so if you will have more than one child in school at a time needing to use college savings, you will want more than one fund. Quote Link to comment Share on other sites More sharing options...
maize Posted April 6, 2015 Share Posted April 6, 2015 Also, if you use an age-based investment option (this is what I have done through our state plan) it will be invested through more aggressive/riskier options for a younger child and more moderate growth/moderate risk for an older one. We don't have much in college savings yet, but I have two accounts--one in my oldest child's name and one in the youngest's name. Ideally I would have an account for each child... Quote Link to comment Share on other sites More sharing options...
Guest Posted April 6, 2015 Share Posted April 6, 2015 I guess my question is, is it better to invest for the one with the most urgent need (14yo) or fir the one with the greatest opportunity for growth (3yo)?? Quote Link to comment Share on other sites More sharing options...
maize Posted April 6, 2015 Share Posted April 6, 2015 Since the beneficiary can be changed, I don't think it matters so much who you are investing for. How about both? 1 Quote Link to comment Share on other sites More sharing options...
5of5 Posted April 6, 2015 Share Posted April 6, 2015 Since the beneficiary can be changed, I don't think it matters so much who you are investing for. How about both? :iagree: Quote Link to comment Share on other sites More sharing options...
Crimson Wife Posted April 6, 2015 Share Posted April 6, 2015 For fairness' sake, I would personally divide the total by the number of children and put the same amount in each. My in-laws played favorites with their kids and as a result, BIL and SIL got substantially different amounts of financial support for college than DH did. BIL in particular got way more, and it wasn't just a factor of tuition inflation (which would be understandable). Quote Link to comment Share on other sites More sharing options...
Guest Posted April 6, 2015 Share Posted April 6, 2015 Interesting. I guess I'm not worried about fairness because we aren't playing favorites, just doing the best we can, kwim? 2 Quote Link to comment Share on other sites More sharing options...
maize Posted April 6, 2015 Share Posted April 6, 2015 Interesting. I guess I'm not worried about fairness because we aren't playing favorites, just doing the best we can, kwim? This is how I see things too. With a bunch of children with individual abilities and needs, and the uncertainty of future circumstances, it is really not workable to try to equalize everything. I have nine siblings; my parents ended up paying more for the education of some than others. Some ended up with debt and some didn't. There were so many factors that went into all of that, but playing favorites was never part of it. Some had more scholarship money, some went to schools with higher costs, some had learning struggles that made getting scholarships harder, some had more financial aid because there were multiple kids in college when they were in school, some mom and dad could cash flow better because dad was making more money... Goodness, if their goal had been to keep their contribution equal for everyone it would have been preposterous. Did they need to contribute the same for the child at the AFA with no personal expenses as for the child with dyslexia attending a low-cost school without scholarships? Should they have somehow come up with money that wasn't there so the oldest wouldn't have to take out loans because some of her younger siblings might not need to take out loans when family finances were less tight and financial aid awards higher? Of course playing favorites is wrong, but doing the best you can for each individual child given family circumstances and child's circumstances is just fine. In any case, opening an account in one child's name at this time does not mean all the funds in that account must go only to that child. 2 Quote Link to comment Share on other sites More sharing options...
Crimson Wife Posted April 6, 2015 Share Posted April 6, 2015 My parents did not contribute equal amounts but they did contribute equal number of years' worth of tuition. My younger brothers got more total money because of tuition inflation, but it was still fair. If one child had gotten scholarships, he/she would not have been punished for it but rather would've been able to get the money saved put towards graduate school or the a house down payment. I would've been royally ticked off if my brothers had gotten substantially more help than I did the way my IL's did with DH and his siblings. My IL's played favorites and it was totally unfair to DH. Quote Link to comment Share on other sites More sharing options...
maize Posted April 6, 2015 Share Posted April 6, 2015 Huh. I'm assuming parental and family attitude plays a role here... FWIW, my parents could never have afforded to pay for each of us what they paid for the siblings who got most; punishment had nothing to do with it and I find it odd that you use the term. Those who were able to get scholarships etc. were grateful and proud to be able to contribute to their own educations and to not put an unnecessary burden on my parents. Money for graduate school was definitely not in the cards--I would have felt seriously guilty taking any more of my parents' resources than absolutely necessary. None of us resents those who got more because they needed more or just because family circumstances were better at the time. I'm thinking you and maybe your dh both must be from families where there were more resources to start with and you felt like you deserved a fair share of them. Different circumstances lead to different perspectives. ETA I am also assuming that there was a lot more going on in your dh's situation than just different amounts of money. Some parents do play favorites and that is always bad :( 5 Quote Link to comment Share on other sites More sharing options...
Crimson Wife Posted April 6, 2015 Share Posted April 6, 2015 If a parent takes away the money that has been saved for the child as a result of the child earning a scholarship, how is that not punishing the child for earning the scholarship? There was money set aside for that child's benefit and because that child worked hard and earned a scholarship, you're going to take that money away from him/her? That looks like a "no good deed goes unpunished" situation from where I'm standing. My parents did not pick up the full tab for my brothers' and my college. However, they did pick up an equal percentage of the total. That was fair. I was a National Merit Finalist and thus eligible for scholarships that my brothers were not. If I had taken one and my parents had given away the money in my college savings fund, you bet I'd have seen that as punishing me for earning the scholarship. Quote Link to comment Share on other sites More sharing options...
maize Posted April 6, 2015 Share Posted April 6, 2015 Ah well, different perspectives. In a large family without significant wealth, there are always more needs than there is money to go around. I would have seen the national merit scholarship as a boon that lightened the overall family load. 6 Quote Link to comment Share on other sites More sharing options...
Guest Posted April 6, 2015 Share Posted April 6, 2015 I have no clue what my parents paid for my siblings college. I know it was more than what they paid for me (zero--I went to college during the collapse of the family farm). I don't control my parents money and I'm not entitled to any of it. I am raising my children to feel the same. If they want to be bitter, I can't help that. 5 Quote Link to comment Share on other sites More sharing options...
maize Posted April 6, 2015 Share Posted April 6, 2015 I am guessing that the background of family circumstances is just too different to compare to Crimson Wife's family. My own family is similar to my family of origin, we have a lot of children and nowhere near the finances necessary to fully fund college for them. Those who are able to get scholarships will get scholarships, those who are not able to we will end up paying more for. We will do our best to help each succeed in college and in life. FWIW Moxie I doubt your children will feel bitter if they see you doing your best for each of them. I certainly expect my children to see the welfare of the family as a whole as a priority. 2 Quote Link to comment Share on other sites More sharing options...
Guest Posted April 6, 2015 Share Posted April 6, 2015 If a parent takes away the money that has been saved for the child as a result of the child earning a scholarship, how is that not punishing the child for earning the scholarship? There was money set aside for that child's benefit and because that child worked hard and earned a scholarship, you're going to take that money away from him/her? That looks like a "no good deed goes unpunished" situation from where I'm standing. My parents did not pick up the full tab for my brothers' and my college. However, they did pick up an equal percentage of the total. That was fair. I was a National Merit Finalist and thus eligible for scholarships that my brothers were not. If I had taken one and my parents had given away the money in my college savings fund, you bet I'd have seen that as punishing me for earning the scholarship. Curious, if you had gotten a full ride, would you expect the money your parents had saved in cash? 1 Quote Link to comment Share on other sites More sharing options...
NotSoObvious Posted April 6, 2015 Share Posted April 6, 2015 Wow. Very interesting perspectives. My mom saved for my college. I got married very young, while we were still in school, and we immediately qualified for grants. It would have *never* occurred to me that I was "owed" whatever else she had saved for my schooling. I felt grateful to have help at all. My parents are saving for my girls. I consider that a gift. If they don't use it for college, they can use it to travel or for a car, etc. Any money my husband and I save for their college is our money to be used as needed. If one gets a scholarship, we'll have more to help the other. They can contribute as well. 3 Quote Link to comment Share on other sites More sharing options...
Danestress Posted April 6, 2015 Share Posted April 6, 2015 I never asked what was saved 'for me.' I guess my parents probably spent more educating my sister, because I went to a state university and paid for grad school almost entirely with scholarships. This has never seemed unfair to me. My parents' money is THEIR money. Even if invested in a 529 'for me' (I don't think that existed back then) it would be their money. They would have a legal right to not use it for me, but would have tax consequences. If they had put it in an account in my name, that might be different. But that probably is not the best way to handle it. I have no idea how they saved and how it was invested. They helped me go to college. They may have spent more on my sisters. I think it is inconceivable that I would have said 'hey, since I got a scholarship, can you give me my money?" It was always theirs. And they always helped with anything they could. I would not have been happy taking 'my' unspent money and then seeing my parents or sister assume debt for her private college. And her private college was the best place for her. I think Op should consult an accountant and do what is best for the family as a whole, with the intention is helping all the children in a similar way. 4 Quote Link to comment Share on other sites More sharing options...
Pen Posted April 6, 2015 Share Posted April 6, 2015 If your state and plan allow smallish amounts to fund a college savings plan, I'd probably get a plan started for each child, but put more in for the oldest ones, just given what I know about the way the college savings work, at least in my state. I'd also be upfront that the money if not used for college would then be transferred to another child still needing it because it is a big family and almost certainly not possible to pay in full for them all unless you are very wealthy. I know some families where an oldest child gets the most help, but then he or she also gives help to the younger ones once he or she has the ability to do that (IF she or he has the ability to do that). For example, if your plan allows, you might be able to take the age of each child and multiply by $100, and then put any excess in the oldest one's account. Our plan has $25 minimum contributions so that would work. But I know some plans I looked at had much higher minimums. 1 Quote Link to comment Share on other sites More sharing options...
Pen Posted April 6, 2015 Share Posted April 6, 2015 Another possibility is to consider what your expected parental contribution would likely be for each child and try to work toward achieving that. 1 Quote Link to comment Share on other sites More sharing options...
Sneezyone Posted April 6, 2015 Share Posted April 6, 2015 There is more in our oldest child's account because we started it three years earlier. We figure that we can roll it down to the younger if she doesn't need it all and if the younger's accounts don't mature at the same rate it's OK because we can cashflow any shortfall. When #2 came along tho, we began contributing equally to both accounts. Quote Link to comment Share on other sites More sharing options...
creekland Posted April 6, 2015 Share Posted April 6, 2015 Our kids have never compared how much each has gotten nor would it occur to them to do so. I see no reason to try to keep them even. When all is said and done, we will try to help all with their loans, but they know we're not making any promises. It will depend upon our income and expenses - and their income and expenses. I expect Pre-med guy to get the most since med school is so darn expensive. I'm not even contemplating trying to create funds to give the other two similar amounts. That idea - or the one that we wouldn't help middle son at all - is totally foreign to me. As to where to put investments... we'd have done much better putting it in our mattress (sigh). 3 Quote Link to comment Share on other sites More sharing options...
Sneezyone Posted April 6, 2015 Share Posted April 6, 2015 My girlfriend's parents fully funded her undergraduate education with the clear, explicit expectation that she would help fund the educations of her younger sibs (10 and 12 years younger), which she did. If you have children spread this far apart, and a strong sense of family obligation, this could also work. Quote Link to comment Share on other sites More sharing options...
Arcadia Posted April 6, 2015 Share Posted April 6, 2015 Curious, if you had gotten a full ride, would you expect the money your parents had saved in cash?I am a 3rd generation middle income, hubby would be a 2nd generation middle income. Hubby had academic scholarships so his parents gave us money for the downpayment of our marital home. His siblings were full pay. I was full pay. Some of my cousins have academic scholarships and they also received the budgeted education money as the downpayment gift. Different families budget differently. My extended family and my in-laws has always told us from young that they will bankroll our first degree at the local universities but we would need scholarships for any overseas university. Tuition fees (other than medicine) were lower though in the 80s-90s. My kids are likely to be full pay and we have started eyeing Canadian universities instead. Their college funds are in their bank accounts joint with me. The amount is about even as they are a year apart. I might actually move their bank account back into mine nearer college age as their bank account has a higher impact than parents bank account on aid. ETA: Just tried Harvard's net price calculator and end up with $16,500 parent contribution for 1st year. That seems unexpectedly low. https://college.harvard.edu/financial-aid/net-price-calculator Quote Link to comment Share on other sites More sharing options...
regentrude Posted April 6, 2015 Share Posted April 6, 2015 If a parent takes away the money that has been saved for the child as a result of the child earning a scholarship, how is that not punishing the child for earning the scholarship? There was money set aside for that child's benefit and because that child worked hard and earned a scholarship, you're going to take that money away from him/her? That looks like a "no good deed goes unpunished" situation from where I'm standing. My parents did not pick up the full tab for my brothers' and my college. However, they did pick up an equal percentage of the total. That was fair. I was a National Merit Finalist and thus eligible for scholarships that my brothers were not. If I had taken one and my parents had given away the money in my college savings fund, you bet I'd have seen that as punishing me for earning the scholarship. I have a completely different take on this. We parents are saving from the money we earn. If it is necessary to use this money to fund our children's education, that's what it will be used for. But aside from the 529 college fund (which is insufficient to cover everything), the other funds are ours, not the child's. If the money would not be needed, we would not "take it away" from the child - the child still receives the education. I am not promising my kids x amount of $. I am committed to helping them fund an education if they need the money. I also do not agree that funds need to be given equally. In my family, parents help the child who needs money. I do not begrudge my sister the years of support she received from my parents when she was a single mom of a disabled kid and studying to become a doctor. I did not need my parents' financial support: I did not have a child to support, and I had a husband. It would never have occurred to me that they should have given me an equal sum. Any money they choose to contribute was theirs. We may quite possibly be in the situation to contribute uneven amounts to our children, since they have different educational goals. We will help fund a four year college education for them. But I am not giving cash bonuses to the child who attends a cheaper school. 6 Quote Link to comment Share on other sites More sharing options...
SeaConquest Posted April 6, 2015 Share Posted April 6, 2015 Given that we aren't yet maxing out our retirement accounts, and that retirement accounts don't count (or count minimally) for purposes of determining financial aid, I am wondering whether it wouldn't be more prudent for us to stop putting money into the 529s in lieu of maxing retirement funds. 1 Quote Link to comment Share on other sites More sharing options...
LucyStoner Posted April 7, 2015 Share Posted April 7, 2015 Given that we aren't yet maxing out our retirement accounts, and that retirement accounts don't count (or count minimally) for purposes of determining financial aid, I am wondering whether it wouldn't be more prudent for us to stop putting money into the 529s in lieu of maxing retirement funds. Yes, max your own retirement first. 2 Quote Link to comment Share on other sites More sharing options...
Pen Posted April 7, 2015 Share Posted April 7, 2015 ETA: Just tried Harvard's net price calculator and end up with $16,500 parent contribution for 1st year. That seems unexpectedly low. https://college.harvard.edu/financial-aid/net-price-calculator I just tried this and tried some different figures or info... It wants $2000 more if I am a USA citizen (or however it put that) than if I am not. I wonder why. Quote Link to comment Share on other sites More sharing options...
Arcadia Posted April 7, 2015 Share Posted April 7, 2015 I just tried this and tried some different figures or info... It wants $2000 more if I am a USA citizen (or however it put that) than if I am not. I wonder why. My oldest is a PR/green card. I just choose citizen since I assume non-citizen was for international applicants. The Stanford net price calculator ask for more information. http://financialaid.stanford.edu Quote Link to comment Share on other sites More sharing options...
maize Posted April 7, 2015 Share Posted April 7, 2015 I just tried this and tried some different figures or info... It wants $2000 more if I am a USA citizen (or however it put that) than if I am not. I wonder why. Maybe it is taking into account tax credits for educational expenses you could receive as a US citizen. 1 Quote Link to comment Share on other sites More sharing options...
Hikin' Mama Posted April 7, 2015 Share Posted April 7, 2015 If a parent takes away the money that has been saved for the child as a result of the child earning a scholarship, how is that not punishing the child for earning the scholarship? There was money set aside for that child's benefit and because that child worked hard and earned a scholarship, you're going to take that money away from him/. That's NOT the parents taking the money away from the child, that's the parents using THEIR money that THEY earned and saved now that the child doesn't need it for tuition. We have three kids and at this point the financial help we've given each of them is no where near equal, BUT we have helped them when they needed it and how they needed it. My youngest still lives at home, but the oldest two have thanked us several times for the help we have given them. I would be inclined to quit helping if one of them started *expecting* me to give them the money my husband has earned and that I have carefully saved. 4 Quote Link to comment Share on other sites More sharing options...
Laura Corin Posted April 7, 2015 Share Posted April 7, 2015 Our state allows for separate funds for each child, but the beneficiary can easily be changed later if one child chooses not to use all of his/her funds. I think I'd probably put proportionally more in the oldest child's fund, but still some in each of the other children's in your circumstance. Our 529s were set up in Texas, I think. I believe that there are funds in each of the boys' names, but the money can be transferred between them. As Hobbes' will have longer to mature and should be bigger, we will be transferring some to Calvin to equalise the amounts. 1 Quote Link to comment Share on other sites More sharing options...
LucyStoner Posted April 7, 2015 Share Posted April 7, 2015 I just tried this and tried some different figures or info... It wants $2000 more if I am a USA citizen (or however it put that) than if I am not. I wonder why.Perhaps because they are accounting for tax credits that an American citizen would be eligible to recieve and that a non-citizen would ineligible to recieve. Eta- I see maize already contributed this. Great minds and all that... Hazard of hitting quote before reading to the end of the thread. 1 Quote Link to comment Share on other sites More sharing options...
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