Saving for Higher(-cost) Education

kids jumping on the bed

Tell me if this sounds familiar: You read a story about how you should start saving for college the minute your kid is born. You look at your baby, pooping in his onesie, and think, “Dang, I’m already late to the party!”

And so you do…nothing. Inertia sets in, you change the dirty onesie and move on.

That’s pretty much what happened to my husband and me when we had kids. Inertia plus fear plus, well, there’s always something else to do with the money, right?

Fortunately, my husband snapped us out of that funk when we had a tidy little stack of cash gifts after our first son was christened, in 2002. After going on, my husband picked a New York State 529 plan, because:

  • As residents, our contributions are deductible from state income tax.
  • We could choose an age-based portfolio, similar to a target date fund, which meant the investment mix would be more aggressive at the start, less so as our son approached college. Or we could manage the stock/bond ratio ourselves.
  • Enrollment was idiot-proof, and after that, we wouldn’t have to do much.

The problem was we didn’t do much—even after our second son was born in 2004, and we opened a 529 for him, too.

Month after month, as statements arrived, guilt built up: Why weren’t we funding these plans for our sons?

Then we had a “duh” moment. We were thinking about our retirement savings, realizing that—you guessed it—there was no way we’d have “enough.” But isn’t saving something better than zilch? Duh.

And so our automatic savings efforts began: $50 per month, per kid. We hardly noticed the dent, but we feel good watching our 529s grow—far slower than our kids are growing, but that’s the point: Though a college-savings plan can cover the whole college nut, chances are it won’t.

But can it take the edge off? Pay for books, maybe a semester or two? That’s worth getting over your inertia.

Denise Schipani blogs at Confessions of a Mean Mommy. Her book, Mean Moms Rule: Why Doing the Hard Stuff Now Makes Good Kids Later, will be published in April 2012. photo source: VickiWadeFineArt’s shop on etsy

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