I agree with this 100%. I am not saving for my kids college education, that is for them to worry about. I help them understand about scholarships, and the importance of good grades, that is what my job is. Not to save tens of thousands of dollars to send them to school, just to party.I may be an oddball but I don't do anything for my kids. I tell them their job is to get good grades so they can get grants and scholarships for school. Then they'll have to make up the difference if there is any. I figure it'll mean more if they have some ownership in financing school.
Unfortunately this is a highly flawed system of thinking and will be the reason your kids end up with $50,000 in student loans to pay for college. You are considering the only option is to put it in a savings account. A savings account is meant to put money aside for a reason in the more near-future. You need to invest this money now and let it grow.College at a state school is estimated to cost $40,000 year by the time my kids are old enough. With the interest rates so low and wages stagnant I think I am better served saving for myself because if I am in a good position financially then I can contribute more of my hopefully larger income later in life without losing money to inflation since 1% interest on savings a savings account is actually losing money every year in a sense. You earn 1% on your saved money yet your health care goes up 5%, food 5%, utilities 3% and your annual raise is only 3%. Id rather have some fun now and put in some extra hours when the time comes to help pay off the loans IF they graduate.
I now put $20/week in a bank account (my kids are currently 2 and 3 years old). I hope I will raise some college funds until then and if the taxes exceed what I raise until then it will be more easier to complete the money that they need.How do you figure out how much money to put away for the kids' college funds? I know no mater what we do it won't be enough, and that every little bit helps. These times are so hard to figure out.
529 will work in conjunction with financial aid but shouldn't affect it too much in regards to still receiving awards. Some awards are based on financials so those may be hurt but it won't affect any grants or scholarships they may be receiving.Does anyone out there have experience with 529s? How much as a percentage of your income do you put in there? Do you find them to be a worthy investment? Any gotchas we might need to know about? And would a 529 show up against potential financial aid?